Should a Solicitor Act for Both Buyer & Seller in a Property Transaction?
In the past it was common for the same Solicitor to act for both buyer & seller in property transactions, known as ‘dual representation’. It was believed that by doing so would aid communications between a buyer and seller, avoiding duplicity and time wasting, since there is no need for letters and documents to go back and forth.
Whilst in theory dual representation sounds like a good idea, in practice it can create more problems than it solves. Following numerous complaints about Solicitors acting for both parties, it is now considered best practice to have separate Solicitors to act for both buyer & seller.
Client Conflict
Solicitors have a duty to act in their clients’ best interest and cannot act where there is a conflict between two clients. A client conflict is any situation where the Solicitor carries out separate duties in the best interests of two or more clients in relation to the same or related matters – but those duties conflict or there is a significant risk that they will conflict.
If one Solicitor is acting for the buyer and seller in the same transaction and the buyer has received a survey with numerous remedial works, you would advise the buyer that it is in their best interest to renegotiate the price due to the amount of works and associated costs required to the property. However, you are also acting for the seller and they do not want to budge on price and they need all of their equity to buy another property. How can you advise both clients and act in both of their best interests? A conflict has now arisen and the Solicitor can no longer act.
Therefore, whilst there is nothing to stop a Solicitor acting for both seller and buyer in a transaction many firms will not do so, given that the risk of a conflict arising at some point in the transaction is high. It would not be ideal to be part way through a transaction to then be told that you have to find a new Solicitor as this would result in delays and wasted costs.
There is one scenario where Solicitors will act for two parties in a transaction and this is where you can act for a buyer and their mortgage lender. However, if a conflict ever arose between the two then the Solicitor would have to stop acting. An example of this would be where the buyer informs their Solicitor that they have lost their job but does not want the lender to know. The mortgage lender requires their acting Solicitor to inform them of any financial changes in the buyer’s circumstances which could have an impact on the mortgage payments being paid on time each month. A conflict has arisen and the Solicitor has to cease acting.
How Can Timms Help?
Timms Solicitors will always ensure we act in our clients’ best interests and we will almost always decline requests to work on behalf of buyers and sellers who are involved in the same transaction. We are committed to providing our clients with professional and tailored advice to help them achieve the best results. If you require any further information, please do not hesitate to contact me on freephone 0800 011 6666.
November 2023