We have recently seen solicitor’s approval clauses appearing in sale and purchase agreements, particularly in new build agreements. They are being included where the purchaser (or vendor) of a property wishes to have the agreement considered by a legal adviser before the agreement becomes unconditional.

If a solicitor finds an issue with the agreement and withholds approval, their client would be able to void the agreement as its conditions will not be met. However, case law provides that there are a very narrow set of circumstances in which a solicitor can refuse to give approval under such clauses.

In a recent case, a purchaser’s solicitor refused to give approval to an agreement on the basis that it did not contain a “subject to finance” condition in favour of the purchasers. The fundamental question in this case was whether the solicitor’s approval clause could be used to alter the agreement by adding a new finance condition. The solicitor’s actions were found to be beyond the powers vested in him by the solicitor’s approval clause, as the introduction of a new condition was found to be a re-negotiation of the agreement.

Under a solicitor’s approval clause a solicitor may consider the legal implications of the agreement for the client.  This may include issues surrounding the registered owner’s name not matching the name of the vendor or the contract placing illegal or unreasonable duties and responsibilities on their client. A solicitor may not become a general or business/financial adviser when considering the implications of a sale and purchase agreement.

We recommend that you be aware of these limitations when recommending or including solicitor approval clauses in an agreement.