Cosgrove Gaynard Solicitors

Conveyancing in Ireland and Bank Requirements for Solicitors Professional Indemnity Insurance on High Value Property Purchases -

Understanding Conveyancing in Ireland

Conveyancing is the legal process of transferring ownership of property from one person or entity to another. In Ireland, this process is carried out by solicitors who act on behalf of the buyer or the seller to ensure that all legal, financial, and regulatory requirements are satisfied before a property transaction is completed.

A typical conveyancing transaction involves:

• Investigating the title to ensure the seller  has good and marketable title to the property.
• Drafting and reviewing contracts for sale.
• Ensuring compliance with planning and building regulations.
• Managing funds, mortgage drawdowns, stamp duty and registration payments.
• Registering the buyer’s ownership and lender’s mortgage with the Property Registration Authority (PRA).

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Given the financial and legal complexities involved, especially in high value transactions, conveyancing must be handled with precision and diligence.

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Professional Indemnity (PI) Insurance – What It Is and Why It Matters

Professional Indemnity (PI)insurance protects solicitors and their clients against financial loss arising from professional negligence, error, or omission in the course of legal practice.

Every practising solicitor in Ireland is required by the Law Society of Ireland to maintain a minimum level of PI insurance cover, currently set at €1.5 million any one claim.

This cover is designed to ensure that clients and third parties, such as lenders, are not left exposed in the unlikely event that a solicitor’s error leads to a financial loss.

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Bank Requirements for Higher PI Cover on High Value Purchases

In recent years, some Irish banks have introduced additional due diligence measures in property transactions where the purchase price exceeds €1.5 million. In such cases, certain lenders now require confirmation that the acting solicitor’s Professional Indemnity Insurance cover exceeds the minimum Law Society requirement, or that the solicitor’s firm is otherwise adequately insured to cover the scale of the transaction.

This requirement is typically seen in:

• Large residential property purchases, particularly in Dublin and high value markets outside of Dublin.
• Commercial property acquisitions where the transaction value substantially exceeds €1.5 million.

The rationale behind this approach is risk management. Banks providing substantial mortgage loans want to ensure that, in the unlikely event of a professional error by a solicitor, there is sufficient insurance cover to protect both the borrower’s and the lender’s financial interests.

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Implications for Clients in High value property purchasers

Not all firms carry additional PI insurance cover and so it is important for clients to be aware that their lender may  refuse to release mortgage funds until satisfactory proof of cover is provided. Therefore it is important if buying a high value property over 1.5 million , that you check if your lender has a requirement for additional insurance cover and indeed when appointing your solicitor, to check they have additional top up professional indemnity insurance to cover the value of your property.

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‍Conclusion

Conveyancing in Ireland remains a highly regulated and professional process designed to safeguard both property buyers and lenders. As property values rise, particularly in high-demand areas , banks are understandably taking additional precautions by verifying solicitors Professional Indemnity Insurance cover.

We at Cosgrove Gaynard solicitors have additional top up cover to ensure we can deal with this query from lenders and choose to maintain a higher level of cover voluntarily, particularly as we regularly deal with high-value transactions.

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