Can You Choose Your Own Lawyer for a Home Loan? Bank Panels and Loan Agreements Explained

Your home loan has been approved and you already have a lawyer you trust for the SPA (Sale and Purchase Agreement). Can the same firm also handle the bank's loan documents? The answer is not a simple yes or no.

Short answer

You can ask the bank to consider your preferred lawyer or law firm for the home-loan documentation, but appointing that firm yourself does not automatically authorise it to act for the bank.

For the financing and security documents prepared on behalf of the bank, the bank must accept or appoint the firm under its own process. Some banks use established panels of approved firms; some may allow another appointment route in particular cases. The practical rule is simple: do not assume. Get confirmation for your bank, your product and your file.

If the same firm is already handling your SPA, tell the bank and the firm early. The firm can then check whether it can take on the financing work and whether the bank will issue the instruction.

In short: you can ask, the firm can check, but the bank approves and issues the instruction.

Why does the bank have a say in who handles the loan documents?

A housing loan is not only about the borrower receiving money. The bank also needs legally effective security over the property or the rights being financed.

Depending on the transaction and the title status, the security may involve documents such as:

• a registered Charge;

• a Deed of Assignment;

• a Power of Attorney;

• a loan, financing or facility agreement;

• guarantees or third-party security documents, where relevant; and

• other documents the bank requires for the product.

CIMB's solicitor page, for example, provides standard housing-loan and security documents specifically for law firms appointed to prepare documentation for the bank's customers. That illustrates why your choice of lawyer and the bank's appointment are connected but not the same thing, although it does not mean every bank runs an identical panel process.

Who does the financing lawyer represent?

This point is often misunderstood.

"Many clients assume the lawyer handling the bank documents is the same as their personal lawyer. In fact, for the financing documentation, that firm acts for the bank. That is why it's important to ask clearly if you need independent advice on the loan terms," says Akmal Saufi Mohamed Khaled, lawyer and principal of ASCOLAW (Messrs Akmal Saufi & Co).

Where a firm is appointed to act for the bank in the financing transaction, it acts for the financier within that scope. The fact that you, the borrower, may pay the legal fees under the Letter of Offer or product terms does not by itself change who the solicitor represents.

The Solicitors' Remuneration Order 2023 (SRO 2023) also provides that a solicitor in a financing transaction acts for only one party to that financing transaction, although the solicitor acting for the purchaser in the sale may also be appointed to act for the financier in the financing transaction.

So the same firm can sometimes handle both the SPA and the financing work, but you should understand the capacity in which it is acting in each.

This does not mean the bank's lawyer can ignore you. The firm must still handle the signing and documents properly, explain the documents as far as they relate to signing, and coordinate what is needed for the loan to be released. But do not assume it is giving you independent advice on every commercial term of the bank's facility.

SPA lawyer vs financing lawyer

A financed property purchase usually involves two legal workstreams.

SPA or purchaser's solicitor

The purchaser's solicitor deals with the purchase and your interests as buyer, including:

• reviewing or preparing the SPA;

• checking the title and the transaction structure;

• the transfer documents;

• deposit, balance and completion arrangements;

• liaising with the seller, the seller's solicitor, the developer or the relevant authority; and

• risks specific to the transaction that affect you as buyer.

Financing or bank solicitor

The financing solicitor acts on the bank's instruction and deals with:

• the Letter of Offer and the bank's instruction;

• preparing the loan or facility documents;

• preparing the security documents;

• signing, stamping and registration where applicable;

• meeting the documentary conditions; and

• the advice, certification or request the bank requires before disbursement.

Sometimes one firm handles both workstreams. Sometimes different firms do. If the bank does not appoint the purchaser's firm, the transaction may involve separate solicitors for the seller, the purchaser and the financier.

The key question is not "Can one lawyer do everything?" It is:

Has the firm been properly engaged for the SPA work and separately accepted or appointed by the bank for the financing work?

What does "bank panel lawyer" actually mean?

In practice, a "panel lawyer" is a firm accepted by a bank for certain categories of work.

But do not assume panel status is:

• the same across all banks;

• the same for all products;

• permanent;

• applicable to every branch or financing structure; or

• enough on its own, without an instruction for your specific file.

Before relying on the word "panel", confirm:

1. whether the firm is accepted by the bank for your type of transaction;

2. whether the bank will appoint or instruct that firm for your file;

3. whether the firm has actually received the instruction; and

4. what work the instruction covers.

A statement from an agent or salesperson that "this lawyer is on the panel", an old list or a poster should not replace current confirmation from the bank and the firm.

Can you ask for the same law firm for the SPA and the home loan?

Yes, you can ask.

It can be convenient because one firm may already understand:

• the SPA deadlines;

• the title status;

• any redemption of the seller's loan;

• consent requirements;

• the amount being financed;

• the expected completion sequence; and

• the information the transaction needs.

But convenience is not the legal test. The firm must still be able to act under the applicable professional rules, and the bank must accept or appoint it for the financing work. Using two firms can also work well, as long as the SPA lawyer and the loan lawyer exchange documents and confirmations on time.

When should you raise your preferred-lawyer request?

As early as practical once you know which bank is likely to finance the purchase, and at the latest when you receive the Letter of Offer, so the documentation appointment is not held up.

A sensible sequence is:

1. identify the firm you would like to use;

2. give the firm the bank name and transaction details;

3. ask whether the firm can take the SPA work and, separately, whether it can act for that bank on the financing documentation;

4. tell the bank officer your preferred firm;

5. get confirmation of the bank's appointment or instruction process; and

6. confirm that the firm has actually received the instruction before assuming the financing documentation is moving.

A phone call, a quotation or your SPA appointment does not automatically mean the firm has received the bank's instruction. Waiting until the SPA deadline is close can create avoidable coordination risk.

What if your preferred firm is not accepted by the bank?

Several outcomes are possible, depending on the bank and the transaction:

• the bank may require another firm for the financing work;

• your preferred firm may continue handling only the SPA and purchase;

• two firms may coordinate the transaction; or

• the bank may have another appointment process (sometimes called an ad hoc appointment) that must be completed before your preferred firm can act. Do not assume this option exists at every bank.

Two firms do not mean something is wrong with the transaction. It simply means the workstreams need careful coordination.

Ask who is responsible for:

• title and SPA matters;

• the bank documents;

• coordinating the seller's redemption;

• consent documents;

• registration;

• the bank's conditions precedent; and

• communication about disbursement.

If your SPA completion period is already running, waiting for a panel decision or changing firms can affect coordination and drawdown. Do not change the appointment structure without knowing the document status, the deadlines and who is responsible for each step.

Who pays the legal fees for the loan documentation?

Do not assume the answer from who appoints the firm.

The borrower commonly pays the legal fees and disbursements for the financing documentation, but check the exact position against the Letter of Offer, the product structure and the quotation.

For conveyancing and financing work in Peninsular Malaysia that falls under the SRO 2023, professional fees follow the SRO. Stamp duty, registration and search charges, service tax where applicable and other disbursements should be shown separately from professional fees. For how the fees are worked out, see our guide on housing loan and loan agreement legal fees in Malaysia.

What should you ask before agreeing to use a firm?

Ask these questions in writing:

• Will the firm act for me on the SPA and purchase?

• Will the same firm also be appointed by the bank for the financing documentation?

• Has the bank confirmed that appointment?

• Has the firm received the bank's instruction?

• Is the quotation for the SPA work, the financing work or both?

• What security documents are needed: a Charge or a Deed of Assignment?

• Who will handle the seller's redemption, if any?

• Are consent or special title issues expected?

• What documents do I need to provide now?

• Who will update me on the status of the financing documents?

These questions are more useful than simply asking whether a firm is "on the panel".

A note on independent advice

If a firm is acting for the bank in the financing transaction, do not assume it is giving you independent legal advice on every commercial term of the bank's facility.

If you are concerned about:

• unusual default provisions;

• guarantees;

• third-party security;

• financial covenants;

• early settlement terms;

• special bank rights; or

• another important financing term,

ask specifically whether independent advice is needed and whether the firm you are speaking to can provide it. You can appoint your own lawyer for independent advice, but the bank may still use its panel firm for the security documents and you may bear additional costs.

How ASCOLAW can help

Through our bank financing service, ASCOLAW handles bank financing documentation, including the loan agreement, the Charge or Deed of Assignment, signing, communication with the bank and the process towards release of the financing. For a bank-financed home purchase, we can review your transaction information and confirm:

• whether we can handle the SPA and purchase scope;

• whether we can act for your bank, or must first obtain the bank's acceptance or appointment;

• what documents are needed to confirm the financing scope;

• whether the SPA and financing work can be coordinated through one firm, with the scope and fees for each stated separately; and

• the next practical step if the bank requires a separate solicitor.

Acting for the bank remains subject to the bank's confirmation and formal instruction. Fill in the ASCOLAW enquiry form below with your bank name, financing amount, transaction type and property location, your Letter of Offer, booking form or SPA if you have them, the name of your SPA lawyer if one is already appointed, and any key dates.

Frequently asked questions

Can I simply appoint my SPA lawyer for the loan agreement?

You can ask the bank to appoint that firm, but your SPA lawyer does not automatically become the loan lawyer. The bank must accept the firm and issue an instruction for the financing documentation.

Is every property lawyer on every bank's panel?

No. Panel status depends on the institution and the scope of the appointment. Confirm the current position for your bank and your transaction.

If the bank has already named a lawyer, can I ask to change?

You can ask the bank officer whether another eligible firm can be considered. The decision depends on the bank's policy, the file status and its approval. Do not stop the existing firm's work until the change, costs and deadlines are confirmed.

Does the loan lawyer represent me?

A firm appointed by the bank for the financing documentation acts for the bank in the loan transaction. If you need independent advice on your personal interests or on particular terms, discuss the scope clearly and consider separate representation.

Can a non-panel firm prepare the bank's loan agreement?

A non-panel firm cannot assume it may act. Ask the bank whether an ad hoc approval is available. If not, the bank will use an approved firm for the documentation.

This article is general information only and is not confirmation of any panel status or bank appointment, or legal or financial advice for any particular transaction. Bank policies, panel arrangements, documents, fees and transaction facts can change, so get current confirmation from the bank and the firm for your file. References to the SRO 2023 and the National Land Code apply to Peninsular Malaysia; Sabah and Sarawak have separate legal-profession and land-law frameworks.

Related guides

• Housing Loan & Loan Agreement Legal Fees in Malaysia

• Conveyancing Lawyer in Malaysia: What They Do, Fees & How to Appoint One

• Guide to Appointing a Property Lawyer and the Cost of Fees for House and Land Purchase Transactions

• How to Compare Two Home Loan Offers Before Signing the Letter of Offer