In this newsletter we highlight a letter which the Law Society (now known as the Legal Practice Council) recently circulated to conveyancers to warn them about unethical practices being conducted by several firms and individual conveyancers, mostly in conjunction with estate agents.
What are these unethical conduct or practices by conveyancers?
- Attorneys are not allowed to share their fees with a non-attorney to secure work or derive a benefit from professional work initiated by a non-legal professional e.g. estate agents, bond brokers, bank officials etc. This is problematic for firms who rely on transfer instructions to be channelled to them by estate agents with who they have a special and mutually beneficial relationship. Paying such an agent an amount of money or paying the agent’s advertisement costs or entertainment costs etc, to procure work, is unethical.
- Attorneys may not pay agent’s commission in advance out of their own funds. Where agents urgently require access to some of their commission which will be due in a few weeks, when registration takes place, they can arrange bridging finance. However, firms with who they have a close relationship are sometimes approached or coerced to provide an advance of their commission out of business funds. Where that agent channels work to that firm, it will be problematic for the firm to risk losing that agent’s favour by not agreeing to such an advance. Adhering to such a request is unethical.
- An attorney is not allowed to act as the conveyancer where his/her name has been preprinted in the agent’s contract. The seller of the property has the right to appoint his/her conveyancer by writing his/her name into the contract. An agent is not allowed to suggest that his/her preferred conveyancer’s name is inserted in the contract without the seller requesting him to do so.
Click here for a copy of the Law Society’s letter.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).