The appointment of the conveyancing attorney is an important decision when selling your home. The conveyancer has to deal with all the parties to the transaction and coordinate a number of processes so that everything comes together at the right time. The decision is usually made by the seller, although sometimes influenced by the estate agent who has brokered the sale. The seller need not necessarily appoint the conveyancer suggested by his estate agent although they often do. Although an estate agent can advise on the appointment, he may not use undue influence to persuade the seller to use a particular conveyancer.
In recent times there has been a tendency for the purchaser to request that his preferred legal professional be appointed as the conveyancer, often on the basis that he, the purchaser, will be able to negotiate a discount on the attorney fees element of the transfer costs. Transfer costs have increased in recent years, primarily due to transfer duty, payable to SARS and this component is of course not negotiable. This would not apply where the sale transaction is subject to VAT as there would be no Transfer Duty.
The request by the purchaser to nominate his attorney may seem harmless as the conveyancer must of course act professionally and owes a duty of care to both purchaser and seller. The first thing to bear in mind is that not all attorneys are conveyancers. Only qualified conveyancers can prepare the transfer deeds and lodge these at the Deeds Office. The next and very important factor to bear in mind is that most of the financial obligations contained in an Agreement of Sale need to be met by the purchaser and, where there is a breach, the party which is in default is often the purchaser. In this situation, the conveyancer, if appointed by the purchaser, now has to put his own client, to terms i.e. instruct him to perform in terms of the Agreement of Sale, an uncomfortable situation indeed. The conveyancer may be unwilling or delay the reporting of this failure to the seller as he may feel a conflict of interest. The conveyancer must of course press his client, the purchaser to comply but it does make it more difficult than the position of a conveyancer appointed by the seller.
If there is contractual dispute between seller and purchaser, a conveyancer appointed by the purchaser may find himself in an untenable position and need to withdraw from the sale or refer the seller to his own attorney, a truly messy situation. If the seller feels that his appointed conveyancer is not performing as he anticipated he, the seller, is well within his rights to appoint an alternative conveyancer but he is not at liberty to fire a conveyancer appointed by the purchaser.
When the seller accepts an Offer to Purchase it is the seller’s duty to deliver the property to the purchaser but only once the purchase price is secured and a number of other processes are in place. The seller should not give away the transfer of a valuable asset just because the other party to the contract is receiving a discount. As the property remains in the ownership of the seller until the date of transfer it is logical that it remains under the control of a conveyancer known and appointed by the seller.
About the author
Laurence van Blerck is a Chartered Accountant and an Estate Agent with Knight Frank Residential Property.