Question: We are trying to buy a new house. The developer is offering great incentives provided we pay a reservation deposit of £2,000, exchange contracts within 28 days and use his solicitor. We are OK with the first two but we want to use our friend, who is a solicitor, to do the conveyancing. The developer is pushing us to use his, saying our friend will be slow. We think his solicitor will be biased, especially as he is paying our legal fees. We do not want to lose the house — so should we just give in?
Answer: Developer incentives vary enormously, from paying stamp duty to free cars. The law firm recommended by your developer will not be the one representing the developer on the sale as that would amount to a conflict of interest.
Some developers have an arrangement with a law firm whereby they refer to them all their new home buyers. They encourage new buyers to use such firms by offering to meet the legal costs. The law firm may be doing the property work at a discounted or reduced rate because they know the development site and act for several purchasers.
Although the solicitors may not want to upset the developers as they refer them work, they have a duty to you as their client to act in your best interests. If a solicitor was biased towards a developer and did not act independently they could face serious disciplinary action.
If you are concerned about the relationship between the solicitors and developers, tell them you intend to use your own lawyer and request they still pay your legal fees. If they refuse, ask why. You may still be able to negotiate payment of the fees as the developers may not want to lose a sale.
WHAT'S YOUR PROBLEM?
If you have a question for Fiona McNulty, please email legalsolutions@standard.co.uk or write to Legal Solutions, Homes & Property, London Evening Standard, 2 Derry Street, W8 5EE.
We regret that questions cannot be answered individually, but we will try to feature them here. Fiona McNulty is a solicitor specialising in residential property.
These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.
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