Borrower & Proprietor

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What is a Borrower and Proprietor Mortgage?

This type of mortgage involves borrowing against a property that you legally own. However, although you are the borrower and the legal owner, you use the borrowed money for non-beneficial purposes. In other words, the money you raise through mortgage is invested without any direct benefit to you.

Borrower and proprietor mortgages are useful in a number of scenarios. However, the lenders may have strict requirements when reviewing applications for this type of mortgage. Most leading lenders also require you to receive independent legal advice (ILA) from reputable independent legal advice solicitors when applying for this type of mortgage.

Here at the London-based Adam Bernard’s law firm, our borrower and proprietor solicitors help you meet all the requirements for the mortgage.

We also have in-house independent legal advice solicitors who can offer ILA through an in-person meeting or via online video conference. Not all lenders allow ILA through video conferencing, however. You should check with your lender to see whether it allows ILA provided through video conference.

Borrower and proprietor mortgages offer many benefits but also come with significant risks. This is why it is important to consult experienced borrower and proprietor solicitors before you finalise the mortgage.

Here is a look at some key benefits and risks involved with a borrower and proprietor mortgage.


The borrower and proprietor mortgage offers numerous benefits.

The primary benefit is that you are able to arrange sufficient investment funds for someone who lacks the money. This can be a family member, relative, friend, or partner.

As the borrower as well as proprietor, you are primarily responsible for raising the mortgage and making repayments. The money you raise through mortgage can help someone related to you to make use of a viable investment opportunity.

It is important to note that you are not a direct beneficiary of the investment in this type of mortgage. This means that the money must be invested in a business or property that is not in your name. The added benefit of this is that you don’t incur additional taxes or stamp duties.

You must meet stringent regulations and requirements for a borrower and proprietor mortgage. Our borrower and proprietor solicitors can help you understand these requirements clearly before you proceed with your application. You may also receive ILA from our independent legal advice solicitors as a part of the application process.

Some Examples of Borrower and Proprietor Transactions

Borrower and proprietor mortgages may be utilized in a variety of scenarios. Some example scenarios include the following:

  • You are raising a mortgage on a property you legally own to invest in a property that is not in your name. So you are the primary borrower and proprietor but you will not be a direct beneficiary of the investment in the other property. This may apply when you want to help out a family member or friend purchase a new home or property or make use of a real estate opportunity.
  • You are mortgaging a property you own to invest in a movable asset, such as a boat. You can’t be named as the legal owner of this movable asset. Furthermore, you can’t be among the beneficiaries. This can be a viable route if you want to purchase a new boat which you and your partners or family members will be using.
  • You mortgage your home or another property that is under your legal title to invest in a business which is not under your name. You can also not benefit from this investment. This can be a viable way of creating an income stream for a family member, partner, or friend. You invest the money but the beneficiary is someone else.

In each of these cases, the investment is made in an asset or business that is not under your name. So you can’t legally be among the beneficiaries of this investment.

Our borrower and proprietor solicitors can advise you on how best to proceed in each of these situations. The guidance of commercial conveyancing solicitors can be invaluable in finalizing such mortgage arrangements without any hiccups.

You may also consult our commercial property solicitors to see if you can utilize any other financing options that better suit your situation.

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Although a borrower and proprietor mortgage comes with the benefits noted above, it also carries significant risks for the proprietor. The risks involved with this type of mortgage include the following:

  • Risks to your home. As the borrower, you are raising a mortgage which is legally owned by you. If you are unable to make repayments, your home is directly on the line. The mortgage lender may seek possession of the home or file a claim in the court to have your property sold and settle the outstanding balance.
  • Risk to your investment. The money you raise through mortgage is to be invested in a property or business which you don’t legally own. This means that you have no legal entitlement to how the money is utilised or to any returns from this money. The business or property owner may use the money at their discretion, not keeping in view your interests. And you may end up losing the investment altogether.

Our commercial conveyancing solicitors can help you mitigate the risks involved with a borrower and proprietor mortgage. You can consult our commercial property solicitors to get a preview of these risks so that you fully understand the implications of your decisions.

It is highly recommended that you don’t proceed with the mortgage without first consulting borrower and proprietor solicitors at a reputable law firm. If you understand the risks and think that they are worth it, you may get in touch with independent legal advice solicitors to formally confirm that you are making this decision of your own free will and in full cognizance of its implications.

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What is Independent Legal Advice?

Most mortgage lenders require you to receive ILA from experienced commercial conveyancing solicitors. The ILA is provided to you by commercial property solicitors in a one-on-one meeting.

Such a meeting may take place in person or online through video conferencing. The availability of the option of ILA by video conference will ultimately depend on the terms of your lender.

During the meeting, you are apprised by commercial conveyancing solicitors of all the terms and implications of your mortgage. The solicitor first goes over all the documents to confirm that your documentation is complete and accurate.

In the next step, commercial property solicitors explain to you how you may lose the home or property if you fail to meet repayment commitments of the mortgage. You are also informed how you can’t be a direct beneficiary of the investment you make from the money raised through your mortgage.

Borrowers are required to receive ILA from professional commercial property solicitors. The ILA is used by the lender as a form of security and legal entitlement in case you are unable to make repayments. In such a scenario, the lender can use the ILA to seize the mortgaged property and sell it on the market to realize the outstanding amount.

You must sign an Advisory letter before your solicitor can prepare the Certificate of Independent Legal Advice. This certificate is then sent by post or email to the lender who can verify it with the solicitor.

We offer expedited ILA services in case you need to urgently meet the ILA requirements of your lender. Our commercial conveyancing solicitors can schedule next-day appointments to complete the ILA meeting and issue the certificate within one working day. However, this will also depend on you completing all the formalities of the process at your end.

Why Choose Adam Bernards?

The highly experienced commercial property solicitors at the London-based Adam Bernard’s law firm provide you comprehensive guidance on all matters related to a borrower and proprietor mortgage.

Whether you are trying to find a lender with the best terms, seeking an estimate of the amount of mortgage you can raise, aiming to negotiate fair terms with a lender, or simply need help with ILA and other formalities of the mortgage, our commercial conveyancing solicitors can help.

We can also work with you to seek other options that may mitigate the risks involved with your mortgage. You may, for instance, be able to apply for an insurance policy that covers your personal risk factor. Our commercial conveyancing solicitors can help you explore these options and choose the one the best suits your circumstances.

You can schedule a free consultative session with our commercial property solicitors for a preliminary discussion of your case. This allows you to get an idea of how we can help your case and offer value for your mortgage application. You can also get estimates regarding legal fees, mortgage limits, and insurance options during this preliminary session.

Get in touch with us today to schedule a free session with our experienced commercial property solicitors.