Should the buyer and seller use the same conveyancer or solicitor?

by Chris Lang on May 8, 2011

Using the same conveyancer or solicitor by two parties Many people who buy their first home are unsure what a conveyancer does, let alone being acquainted with one. Not knowing which conveyancer or a solicitor to go to, sometimes they may think it is easier to just use the same one their seller is using. But is the easiest way always the smartest way?

The short answer is no.

If you are about to buy or sell a house, and are thinking about using the other party’s solicitor or conveyancer, think again. Some estate agents will have you believe it will help get things moving faster, or that financially it makes sense. Do you know what they are forgetting to tell you about? The possible problems in case there is a conflict of interests.

“Come on, Chris”, you say, “what is this conflict of interests rubbish?”

Imagine this. Peter wants to buy Darren’s house. They agree on a price and sign a contract. Since Peter is a first home buyer and doesn’t know any conveyancers, he decides to use Darren’s conveyancer.

Unfortunately Peter runs into money trouble – his father, who was supposed to send him the money to pay a deposit, didn’t make the transfer on time. This means that Peter can’t pay the deposit by the due date specified in the contract. Now that’s a real problem, because it constitutes a breach of contract.

And here is where we get to the conflict of interests part. The conveyancer, on the one hand, has an obligation to call the seller and tell him “Darren, the buyer hasn’t paid the deposit, so you may want to consider terminating the contract”. On the other hand the conveyancer has an obligation to call the buyer and tell him “Peter, if you don’t pay the deposit ASAP, the seller may terminate the contract”. But who does he call first, Darren or Peter? Obviously one of them will get the call first. If the conveyancer calls Darren first, it’s not in Peter’s best interest. If the conveyancer calls Peter first, it’s not in Darren’s best interest.

And here’s another thing – in almost every state the Code of Practice suggests that in a situation where a conflict of interests arises, the conveyancer / solicitor should “decline to act”. This could mean that the buyer or / and the seller need to switch lawyers while in the middle of a property transaction, which may not be easy, or cheap, or both.

Do you still think the trouble is worth the money you save?

Photo source

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: