Solicitor's undertaking
What is a solicitor's undertaking at a loan settlement?
ONE OF 209 TERMS · FREE · NO SIGNUP
BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
// THE SHORT ANSWER
A solicitor's undertaking is a binding promise a lawyer gives in their professional capacity to do something: most often, at a property settlement, to pay the outgoing lender from the purchase money and deliver its discharge so that the new lender's mortgage can be registered first. Breaking one is a professional disciplinary matter as well as a legal one, which is why lenders and lawyers rely on them to move money and documents at the same moment. An email promising a discharge later is not one.
BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.
// WORKED IN
// NEXT TO IT
- Personal guarantee release
- General security agreement (GSA)
- Subordination
- Intercreditor agreement
- Loan to value ratio (LVR)
- Forced-sale value
- PPSR (Personal Property Securities Register)
- Retention of title
- Purchase money security interest (PMSI)
- Preferential creditors
- Letter of comfort
- Cross-guarantee
- Floating charge
- Structural subordination
- Recovery waterfall
- First mortgage
- Pari passu
- Loan to security ratio (LSR)
- Lending value
- All-monies clause
- Valuation reliance letter
- Loss payee (bank's interest noted)
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