FILTERS:

Risk Alert Bulletin - 1

16 July 2003

1. Incorrect advice given to a purchaser/seller, e.g. failure to advise purchaser not to begin improvements on the property prior to transfer.

2. Creation of a conflict of interest situation when acting for both the seller and purchaser.

Transferring attorneys are duty bound to safeguard the legitimate interests of both purchaser and seller, especially when one of the parties is not represented. The amount paid in by the purchaser should remain in an interest-bearing account for the benefit of the purchaser pending the transfer of the property.

3. Use of bridging finance companies/furnishing of undertakings and the implications thereof.

Attorneys should not give undertakings that transfers will go through, especially when any number of things may prevent a transfer from being registered. By giving such undertaking to these bridging finance companies, attorneys place themselves and insurers at risk. It is further debatable as to whether such conduct can be classified as part of a conveyancer's practice.

4. Failure to ensure that security is in place, e.g. registration of bonds or suretyship agreements.

5. Inadequate supervision of paralegals.

Proper supervision should always be exercised over paralegals and administrative staff. Wherever possible, cheques should not be signed by partners not dealing with the file unless the full facts pertaining to the matter are disclosed at the time. An efficient accounting system should always be in place.

Attorneys Insurance Indemnity Fund website

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