Solicitor negligence

April 16, 2018

When buying or selling a property, consumers often seek the services of a solicitor to carry out all legal and financial obligations of the transaction. These obligations can be complicated for those who do not have broader knowledge of the law and its consequences in the event some mishaps eventuate. Consumers generally engage solicitors not only for peace of mind but also to ensure that their sale is finalized without any risks.

Regardless of the circumstances, lawyers are required to always be ethical and professional in their dealings. Lawyers must not forget that their clients place a lot of trust in them to provide services appropriately.

In a recent case received by the Consumer Council of Fiji, a complainant had purchased a property through Housing Authority with transfers to be executed by a renowned local legal firm on behalf of the vendor.

The property owner’s second wife had acted as administrator of the property after he passed away. The deceased had four children from his previous marriage who rightfully had a share in the property.

During the settlement, all four children and the administrator received a share of the settlement funds. The lawyer was also paid legal fees for concluding the settlement.

A few months later, when the new buyer wanted to refinance her home loan with ANZ bank, the Titles Office could not release the title from Housing Authority, as the transfer was deemed incomplete.

It was found that no deed of renunciation was executed by the deceased’s four children and only the administrator’s share was being transferred to the current owner.

Due to this, the new owner was unable to refinance her home loan with ANZ, which offered better rates, depriving her to switch banks for better deals.

Through the Council’s intervention it was found the lawyer had failed to notify the administrator that the deceased’s children needed to sign a deed of renunciation to indicate they had relinquished their rights to the house.

The absence of the deed of renunciation from the four children meant the new owner only partially owned the house as the previous owner’s children still had rights to it.

The lawyer’s failure to execute his duties professionally had inconvenienced the new owner who until seeking to refinance her home loan thought she owned the property in its entirety.

As such, the lawyer’s actions is deemed as Professional Misconduct or Unsatisfactory Professional Conduct under section 83 of the Legal Practitioners Act 2009.

Section 83 (1) (c) of the Act indicates “charging legal fees for work not carried out by the legal practitioner or legal practice or for incomplete work” as professional misconduct and/or unsatisfactory professional conduct.

Section 83 (2) further stipulates: “’Professional misconduct’ includes malpractice, and ‘unsatisfactory professional conduct’ includes unprofessional practice or conduct.”

In the present case, the lawyer had failed to disclose to both the administrator and the buyer of the property that the deed of renunciation from the four children was needed to complete the settlement. If the complainant hadn’t gone to the bank to refinance her home loan she would not have known that she did not completely own the property.

The deed of renunciation was needed because the deceased had no will. In the absence of a will, his second wife and children all had equal shares in the property.

The lack of knowledge on what was required to complete the sale also showed that when consumers hire the services of a law firm they will hold the firm and the solicitor responsible.  Such behavior of solicitors not only erodes consumer trust in them but makes consumers question whether some of these lawyers are competent.

Consumers are reminded to consider the following when they purchase a property:

  1. Title of Property – ascertain whether the property actually belongs to the person selling. This can be determined by verifying with the Office of the Registrar of Titles.
  2. Utility Bills – electricity and water bills must be cleared by the previous owner.
  3. City and Town Rates – there should be no arrears with the municipality.
  4. Engineer’s Certificate – this will determine whether the house meets the building standards required by the State.
  5. Cyclone Certificate – this is to determine whether the house is built to withstand the different categories of cyclones.
  6. Sales and Purchase agreement – It is advisable to have a duly executed Sales and Purchase Agreement that sets out the terms and conditions of the sale of the property in question. 

Consumers must always ensure listed documents are available and bills cleared to ensure they aren’t inconvenienced when the sale has been finalised. Consumers are advised to seek the Council’s assistance and/or lodge complaints through the National Consumer Helpline toll-free number 155 if they encounter any unethical practices by solicitors. They may also lodge formal complaints and/or seek advice from the Legal Practitioner’s Unit within the Ministry of Justice.