IDEALLY, each party to a conveyancing transaction should be represented by a solicitor and a solicitor should not represent more than one party in a conveyancing transaction.
However, sometimes one party may choose not to be represented by a solicitor and forgo his rights to engage a solicitor to represent him due to either not wanting to fork out legal fees or being unable to do so. Some may be unaware that they have the right to appoint their own solicitor to represent them.
In a sale of property, often, it is the vendor who chooses not to be represented by a solicitor. In such a situation, it is often the purchaser’s solicitor who would assist the vendor to attend to the requisite duties of the vendor in order to complete the sale and purchase transaction.
For example, if the property is encumbered, the purchaser’s solicitor would assist the vendor to attend to the redemption of the property from the vendor’s financier. Another example is, if the title of the property is endorsed with a restriction against transfer without the state authority’s consent, the purchaser’s solicitor would assist the vendor in applying for the consent. Or, the vendor may request the purchaser’s solicitor to assist in preparing his real property gains tax returns. The vendor would, of course, bear the fees and disbursements of the purchaser’s solicitor for these matters.
Often, the vendor would have the mistaken idea that the purchaser’s solicitor is representing him in the sale and purchase agreement. In reality, the solicitor is acting only for the purchaser and not the vendor. It is advisable for the purchaser’s solicitor to inform the vendor clearly that the solicitor is not the vendor’s solicitor in the sale and purchase agreement.
Another common situation is when buying a property directly from a developer. In today’s market trend, many housing developers offer to absorb the cost of the legal fees of the solicitor. In such a transaction, a purchaser may mistake the solicitor attending to the purchaser as representing him when, in actual fact, the solicitor is representing the developer and the purchaser is not represented.
The purchaser has a right to appoint his own solicitor for a sale and purchase agreement with the developer. However, the purchaser would then have to bear the legal fees of his own solicitor and will not be entitled to the “free/subsidised legal fees“ scheme usually offered by the developer these days.
It is important for each party to appoint his own solicitor and to be represented in a conveyancing transaction. A solicitor will ensure that his client’s rights and interests are protected at all times when the terms and conditions in the sale and purchase agreement are being negotiated and during the course of the transaction to its conclusion.
If, for example, the vendor chooses not to be represented, he is burdened with vetting the sale and purchase agreement himself. Sometimes, a vendor may not read through the terms and conditions of the sale and purchase agreement as many do not understand the legal jargon used. Since the purchaser’s solicitor represents the purchaser, it is almost inevitable that many provisions would be in favour of the purchaser.
Despite what may be a common perception that a sale and purchase agreement is merely form-filling and a “standard” document, each of the terms of the agreement is important and various problems may arise in respect of most of the clauses, if they are not clearly understood by the parties and set out properly.
If the vendor is not represented by a solicitor, he must conduct his own follow-ups in ensuring that the transaction of the transaction proceeds within the time frame provided in the sale and purchase agreement. Not all vendors will go through the trouble to call the purchaser’s solicitor on a regular basis to get the latest updates on the status of the transaction and will only contact the purchaser’s solicitor when the matter has dragged on for too long.
Sometimes, a vendor may have difficulty when the transaction is delayed and he is left in the dark. When a vendor is not represented by a solicitor, he may not always be kept up to date on the current status of the transaction as the purchaser’s solicitor owes a duty to the purchaser and not to the vendor. The vendor may not even know that the transaction has gone way beyond the stipulated time.
Some vendors may be in dire need to settle their debts and were hoping for the balance sum to be released to them expeditiously, but for some reason, the transaction was delayed. This may in turn cause the vendor to become suspicious of the circumstances and he may then decide to appoint his own solicitor half-way through the sale and purchase transaction. But, by then, things would have turned sour. Parties would then be threatening to terminate the sale and purchase agreement and the dispute may land up in court.
It is certainly advisable not to save on legal fees by not appointing one’s own solicitor in a sale and purchase of property.
When problems or disputes arise in a transaction, not only would one incur additional costs in trying to resolve them but one may have sleepless nights.
In short, it would be sen wise and ringgit foolish not to have one’s rights and interests protected in the first place by being properly advised by a solicitor.
The writer, a lawyer practising at Messrs Chin & Partners, is a member of the Conveyancing Practice Committee, Bar Council, Malaysia. This column is brought to you by the Malaysian Bar Council for your information only. It does not constitute legal advice.