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Do estate agents use undue influence?

The issue of some estate agents insisting that buyers and/or sellers use a particular solicitor or conveyancer has reared its ugly head again. I have received a number of emails from Bold Legal group members this week:

A. “Is anyone doing anything about the widespread practice of agents advising buyers that their offer will only be accepted if the agents’ ‘preferred’ solicitor is used?”

B. “It is not only agents but also developers that push very hard for their pet firm to be used. Is this not a breach of human rights to restrict the choice of legal representation of the commercial advantage of the seller? Should the Law Society, Council for Licensed Conveyancers or even the Bold Legal Group be putting out some publicity to make buyers aware of this undue influence for financial gain directly or indirectly by some sellers or estate agents?”

C. “I think that where this is based upon the fact that a referral fee is payable a complaint should be made to the SRA. I had an occasion where we were acting on a sale and our clients were told they had to use their solicitors on the purchase - all to do with the referral fee. It is well known that this particular firm pays a high referral fee and that they add this on to the fees payable by the client.   

The Solicitors Code of conduct states that you must achieve the outcomes below:

1. Your independence and your professional judgement must not be prejudiced by virtue of any arrangement with another person;
2. Your clients' interests must be protected regardless of the interests of an introducer or fee sharer or your interest in receiving referrals;
3. Your clients must be informed of any financial or other interest which an introducer has in referring the client to you;
4. Your clients must be informed of any fee sharing arrangement that is relevant to their matter;

How can receiving work that has been forced upon you comply?”

So, my four questions to estate agents are:

How widespread is this practice? 

Is it damaging the reputation of estate agents? 

Should it be stopped and if so, how?

*Rob Hailstone is the founder of the Bold Legal Group

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