Conveyancing
Call for guidance for estate agents in conflict of interest cases
17th August - Paul Marsh, Vice Chairman of the Law Society calls for better guidance for estate agents in relation conflicts of interest...
Professionals acting for different parties in a number of related transactions run the risk of encountering a conflict when they have to consider the interests of both. Estates agents are no different when they find both the buyer and the seller of separate properties are on their books.
Today's consumers are considerably more sophisticated than they used to be. Their awareness of their rights and desire to be fully informed should be seen as a positive characteristic of the residential property selling process.
The need to satisfy consumers has led to many initiatives across a number of sectors which are geared towards much greater transparency, redress and a general culture of putting the customer first'.
In light of this move towards a consumer friendly environment, a more open approach may be needed when agents act for buyer and seller in related transactions, as much information may need to be conveyed to both parties to avoid the problems associated with conflicts of interest emerging.
Where an estate agent acts for Mr Jones in connection with the sale of 10 Lime Grove, which is being purchased by Mrs Smith, it is not unusual for the estate agent to also be acting for Mrs Smith in connection with the sale of 20 Lime Grove (Mrs Smith's related transaction). In other words, the estate agent is acting in the sale of both properties and therefore has a potential conflict of duties to Mrs Smith and Mr Jones.
Arguably the estate agent has an interest in the sale of Number 10 proceeding (over and above his fees for acting in the sale of Number 20 because without it the sale of Number 20 will not proceed. It is in the estate agent's interest to sell both properties at any justifiable price....
The rest of Paul Marsh's article can be found at http://www.lawsocietymedia.org.uk/site.php?s=1&content=67&article_id=1&mt=35
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