Acting for both parties in a Conveyance
Acting for both parties in a Conveyance
In conveyancing transactions, we are sometimes asked to act for both parties: the Vendor and the Purchaser.
This is the basic rule: A solicitor/conveyancer may act for both parties, BUT once a conflict arises between the duties owed to those clients, the solicitor may continue to act for ONLY ONE of the clients and ONLY IF the duty of confidentiality to the other client is not at risk AND the parties have given their informed consent.
More often than not, if a conflict arises, lawyers/conveyancers should in fact stop acting for both parties and send both parties away to seek alternative representation. This incurs more costs for the client and a whole heap of added stress!
Conflict Areas
This is a common conflict area. Acting for both parties places the lawyer/conveyancer in a position where it cannot act in the best interests of each client. Examples include:
- the purchaser client cannot obtain finance and wants an extension of the subject to finance clause, but the vendor client has another buyer ready to proceed and wants to get out of the contract
- the purchaser tries to avoid the contract based on no finance approval having been obtained, and the vendor wants to argue the purchaser has not used best endeavours to obtain finance
- an issue has not been disclosed in the section 32 statement that would have entitled the purchaser to rescind the contract
- there is an argument about the interpretation of a special condition or what is a fixture or fitting.
Ethical and Liability Issues
Lawyers and Conveyancers acting where a conflict breaks out between the vendor and purchaser is dangerous. We expose ourselves to allegations that we have breached our professional conduct rules and duties at law as well as allegations that we preferred the interests of one client over another. The consequences can be serious and include:
- a firm being restrained from acting in a particular matter
- professional negligence claims
- professional misconduct complaints and disciplinary action
- substantial legal fee write-offs and refunds
- potential reputational damage.
Key Takeaways
Acting for both parties in a sale/purchase creates the potential of your conveyancer/lawyer divulging one parties interests to the other party. This is treacherous terrain and can expose us to ethical and liability risks (which cannot always be cured by the parties to the transaction giving consent).
As a general rule, we opt NOT to act for more than one party in most transactions. We do this to protect your interests and uphold our duty to you. One party only.
For experienced and dedicated lawyers in Cobram and Northern Victoria, call Haven Legal Cobram today.
We strive to deliver outstanding legal services that exceed your expectations and provide you with complete peace of mind.
