Professional conduct issues in property transactions

What are the SRA principles?

Uphold rule of law/justice; maintain public trust. act independently;honestly; wth integrity; promote edi; act in each client’s best interests

What does SRA code of conduct do? (CCS)

Expands the Principles into specific professional standards for solicitors

CCS 3.2 requires what?

A competent service delivered in a timely manner

Competent service what to check?

You have skills/experience for the matter, otherwise get supervision or refer

“Timely” service— what to do if overloaded?

Decline or refer so the client isn’t prejudicied by delay

CCS 3.1— when may you act?

Only on client instructions or from a properly authorised agent

Identity & authority— key steps?

ID/verification of client; for companies: director validity + board authority (e.g. resolution)

Spouse giving instructions— what safeguard?

Get written confirmation from the other spouse

Own-interest conflict (SRA glossary)

Your duty to a client conflicts (or risks conflicting) with your own interests

CCS 6.1 rule on own-interest conflicts?

Must not act if such conflict exists or there’s a significant risk— no exceptions

Example of own-interest conflicts?

Matter affects value of your/close person’s property

Example of own-interest conflict (relationship)

Opponent is your best friend and it affects objectivity

Friend at another firm acting opposite—can you act?

only if you remain objective/independent; if not, decline/transfer

Client conflict (sra glossary)

Duties to two+clients in the same/related matter conflict

CCS 6.2 default rule on client conflicts?

Don’t act if conflict or significant risk— unless a narrow exception applies

Two exceptions under CCS 6.2?

Substantially Common Interest (SCI) or Competing for the Same Objective (CFSO)

Substantially Common Interest (SCI)

Clients share a clear common purpose and strong consensus on how to achieve it

SCI example

two regular JV buyers instruct a joint report on title for a site

SCI example that doesn’t fit

Buyer vs seller of the same property— interests diverge on risk/speed

Competing for the Same Objective (CFSO)

clients compete for one asset/opportunity via auction/tender/insolvency—only one can win

CFSO typical use case

Structured auction for a property— sophisticated clients

extra condition for either exception (i-iii)

(i) informed written consent; (ii) safeguards confidentiality; (iii) reasonable to act (e.g. no vulnerable client disadvantage)

Can you act for the buyer and lender? (residential)

Usually yes— common interest in good/marketable title; use standard certificate of title

Acting for borrower and lender? (commercial)

No negotiated loan/security terms create conflicts

CCS 6.3— Duty of confidentiality applies to whom/when?

Current and former clients; continues after death

confidentiality— when can you disclose?

If requires/permitted by law or client consents (HMRC/NCA requests; court orders)

Duty of disclosure to own client (CCS 6.4)

tell the client all material information you know about the matter

Disclosure vs confidentiality who wins on conflict?

Confidentiality overrides disclosure

How must you give information?

In a way the client can understand (tailor to sophistication)

Price mismatch: contract £150k; mortgage offer says £160k whats the issue?

Must disclose to the lender (material), but bound by buyer confidentiality

Correct steps in the price mismatch scenario

Seek buyer consent to inform lender; if refused—> cease to act for lender (and usually buyer)

First five conduct questions to ask?

Competence? Authority? Conflicts? Confidentiality? Disclosure plan?

if you can’t meet “competent and timely” (CCS 3.2) what do you do?

Refer or obtain supervision— don’t prejudice client

If there’s an own-interest conflict risk?

Do not act— no exceptions

If relying on SCI/CFSO?

Get informed written consent, confidentiality safeguards and confirm it’s reasonable