Selling Using Same Solicitor As Buyer

binky123

We have sold our property through the same estate agent as our buyer sold theirs through. Their recommended solicitor also happens to be priced competitively and is a well established local firm with a good reputation and recommendations from family/friends/local forums. Our buyer is using them already and we have decided to go with them too.

Is this likely to speed things up or is there more complexity? They have sent us a form to sign to agree and pointed out a couple of potential pitfalls around conflict of interest, but they will be separate solicitors at separate offices.

Also, what kind of conflict of interest would arise and who would be better placed because of the situation? Seller or buyer? The solicitor handling our side is also a partner whereas the buyer's is just a conveyancer. Could that put things in our favour if anything was to go wrong? It should be a straight forward sale in theory though.

G_M

If different solicitors in different offices do this, then it means the guidelines - but I would not do it.

No - it does not speed things up.

If the same firm is fighting for the rights/protection of one client eg buyer, then the conflict is that the same firm may fight less hard for the rights/protection of the other client.

The buyer, of course, has more at risk since he has to live wih the property afterwards, together with whatever legal oversights there were, or rights of way missed.

My advice would be to separate the conveyancing completely, but it's up to you.

phill99

I'm not convinced that this is a good idea. They will have a conflict of interest as they are supposed to be independently representing one party in the transaction. How can they effectively represent both parties?

You need someone completely different.

DVardysShadow

Main risks are for the buyer. If the buyer was asking, we would tell them to change solicitor immediately. I think your biggest risk is if the buyer suddenly wakes up to the conflict of interest issue and if things start getting sticky, they may well decide to restart with a different solicitor. This may well result in more difficulty than starting with different solicitors in the first place. There is a particular imbalance in that as seller you have the partner whereas your buyer has the conveyancer. This means that there is an unequal power relationship in favour of the seller's solicitor, who could pull rank to get things past the buyer's solicitor, even though they are in different offices. While I would not be unhappy about how this would impact me if I were the seller, if for any reason it turns out to be a difficult sale, it may cause problems if the buyer becomes aware of issues. For example, if the partner pulled rank on the conveyancer, you might find that a good conveyancer would subtly put the buyer on the track of getting a different solicitor ...

Personally, as seller, I would avoid this arrangement.

binky123

If a conflict were to arise though, although they wouldn't admit to it, isn't there a chance that the buyer's more junior conveyancer would "submit" to our partner solicitor? Effectively not wanting to upset the big boss.

Also as I said, I can't really think there would be many issues because we were very thorough when we bought it and not much has changed since.

binky123

timmyt wrote: »

New SRA rules for lawyers states that they do not expect to see this practice, so many many forms have stopped it, as it leads to a conflict of interest hence why it is now frowned upon.

this does mean some firms losing work, like your intended firm if they paid attention to the rules.

by the sound of it, they are ignoring them.

problem is the SRA are doing spot checks, and if they do it mid way into your deal, you will have to find another lawyer.

i would avoid any firm of solicitors breaching this new rule, as what else are they breaching

:eek: Really? The firm is over a century old and has about 20 partners?! Surely it wouldn't risk that? It's not a tinpot one, they cover lots of areas of law.

DVardysShadow

binky123 wrote: »

:eek: Really? The firm is over a century old and has about 20 partners?! Surely it wouldn't risk that? It's not a tinpot one, they cover lots of areas of law.

The News of the World was over a century old. It remained true to its founding ethos to the end ... :rotfl::rotfl::rotfl:

The Banks which led us into economic crisis are also centuries old - and while many of the old Quaker values on which some of them were founded lasted for an incredibly long time after the Quakers were no longer involved, they have ultimately succumbed to modern business ethos.

It is who the partners are now and their ethos which matters.

binky123

"3.6.4 Assessing whether or not there is a conflict of interests The SRA have indicated in its quick guide, ‘Outcomes-focused regulation at a glance’ that it believes acting for buyer and seller is an area which carries a high risk of conflict of interests and that it does not expect you to act for buyer and seller routinely.
In the instances when you might decide that you can act under the SRA Code for both buyer and seller, it is up to you in these circumstances to show the basis for your decision and justify your actions to the SRA. In the Law Society’s view it would be good practice to record your decision and reason for it if you decide to act in these circumstances.
If you decide to act in a particular circumstance then you should actively monitor this situation for a conflict arising as there could be considerable implications for each of the clients and for others involved in a conveyancing chain if you need to withdraw because of a conflict situation.
If you decide that there is no conflict of interests between a buyer and seller then you must consider whether there is any risk of not adhering to any of the principles.
The key principle you should take into account is principle 4, 'act in the best interests of each client'. Other key principles are principle 2 'act with integrity', principle 3 'not allow your independence to be compromised' and principle 5 'provide a proper standard of service to your clients'. Chapter 4 on Confidentiality and disclosure is also important and more information on this is outlined below."


Reads like they can still do it to me. They have warned that if conflict of interests arise they would not be able to deal with it. Sounds like they're within the rules to me. I'm more interested as a seller though, and the relative advantage or disadvantage this situation gives me both over the buyer, and collectively with the buyer.

DVardysShadow

binky123 wrote: »

.... Reads like they can still do it to me. They have warned that if conflict of interests arise they would not be able to deal with it. Sounds like they're within the rules to me. I'm more interested as a seller though, and the relative advantage or disadvantage this situation gives me both over the buyer, and collectively with the buyer.

I doubt anyone is going to tell you that it is an entirely good thing, nor even a quite good thing.

G_M

You asked for advice. It has unanimously been that you should avoid sharing a firm with your buyer. Whether it is against the 'rules', or the 'guidance', or whether only against those rules in certain circumstances, the advice is the same.

Best avoided.

However, you seem determined to convince (us?... yourself?) into believing there is no risk.

So go ahead. After all, it's not as if we're talking about a significant transaction here is it?

binky123

DVardysShadow wrote: »

I doubt anyone is going to tell you that it is an entirely good thing, nor even a quite good thing.

Fair enough. I just thought that, in a situation of buyer and seller using the same firm, one party would have the upper hand and that would be the seller, especially with a more senior solicitor.

If I was the buyer I'd not think twice about finding someone else instead.