Private road: Lender wanted maintenance agreement in place
A CILEX lawyer who misled her lender client so as to complete a residential property transaction has been made subject to a control order by the Solicitors Regulation Authority (SRA).
Marilyn Neptune, who worked in the Southampton office of Blake Morgan at the time, is now subject to an order under section 43 of the Solicitors Act 1974, which means she cannot work at an SRA-regulated body without its permission.
A notice published by the regulator said Ms Neptune was acting on behalf of both the purchasers and the mortgage lender.
In June 2023, after exchange of contracts, the lender told Blake Morgan that it required a formal maintenance agreement for a private road as part of the transaction.
However, there was no such agreement in place and Ms Neptune knew there was insufficient time to arrange one prior to the planned date for completion. Without it, the lender might not release the £350,000 loan.
A couple of weeks later, the lender asked for confirmation that its requirements had been met, and gave Ms Neptune permission to go ahead provided she was satisfied that she had complied with the Lenders Handbook. She confirmed that she was satisfied and the transaction completed.
Soon after, Ms Neptune completed a professional indemnity insurance notification form, reporting to her employer: “I am negligent because I confirmed that a maintenance agreement existed when it did not, because I calculated the risk of failing to complete to be far more severe than trying to resolve the problem, if necessary, retrospectively after completion.”
The SRA said this conduct made it “undesirable for her to be involved in a legal practice”.
“Whilst this appears to be an isolated incident a client was misled in order to induce the release of mortgage funds and avoid a delay to completion. There is a risk of repetition should such circumstances or similar environments arise.”
The regulator acknowledged that Ms Neptune had “fully engaged” with its investigation and demonstrated “sincere remorse and insight”.
In mitigation, the lawyer pointed out that the incident only came to light because she self-reported and said it was a one-off incident where the instructions of the mortgage lender changed after contracts had been exchanged.
She added that her behaviour was affected by “personal issues”.
