By Julie Barkla
February 6, 2017
Many solicitors in Victoria have long been affiliated with mortgage investment businesses, which businesses can provide opportunities for their clients to make investments which are secured by registered first mortgages over Australian real estate. Unfortunately for those clients, the Legal Profession Uniform Law now seeks to prevent solicitors from introducing their clients to affiliated mortgage practices.
Section 258 of the Legal Profession Uniform Law contains various prohibitions on law firms in relation to managed investment schemes and mortgage services. Failing successful lobbying by the Law Institute of Victoria, which is presently being embarked upon, these prohibitions will take effect on 1 July 2018.
There would appear to be some force in the argument that the new section 258 constitutes an arbitrary restraint of trade upon the legal profession which in effect prohibits legal firms from providing services which are otherwise permissible under the Corporations Act 2001 (Cth). This new prohibition would also not appear to be in keeping with the multi-disciplinary philosophy found elsewhere in the Uniform Law.
Those seeking investments might well be forgiven for thinking that their interests may be better served by sourcing mortgage investments through their lawyers, the legal profession being a highly regulated one, as opposed to having investments introduced by those with little if anything to lose, if and when difficulties arise.
For further information, please contact Julie Barkla.