Why You Should Be Represented By A Lawyer In A Property Transaction
I have come across many enquiries from potential clients asking if they could do away with a lawyer in a property transaction. More often than not, the reason for not wanting to engage a lawyer to represent them is due to the myth that you only need one lawyer to prepare the Sale & Purchase Agreement for both parties to sign. Indeed, it is a myth and has serious implications to the parties. In most cases, if not all, the parties are unaware that they should be represented by a lawyer in a property transaction. These are good reasons why you should be represented by a lawyer in a property transaction.
A Lawyer Cannot Act For Both Parties
Section 7(1) of the Solicitors Remuneration Order 2006 states that a solicitor may not act for more than one party in a particular transaction subject to some exceptions. It is commonly held that the party which the lawyer bills would be the party to whom the lawyer is representing. Though the other party may, by mutual agreement, contribute towards the paying of the bill, ultimately the lawyer is answerable only to the party whom he issues the bill to. Acting for a party is to be distinguished from the mere act of preparing miscellaneous documents, filing and / or witnessing the signature of the other party where there are no conflict of interests involved.
Protection Against Unfair Terms
Quite apart from the fact that under the law a lawyer cannot act for both parties in a property transaction, having a lawyer protects the client against unfair terms being drafted into the agreement. The lawyer is expected to explain all the terms drafted and the consequences of the terms so that the client would be fully informed of what he is getting himself into when he ultimately signs the agreement. Most agreements are drafted with legal jargons and it can be bewildering to the man on the street what these terms mean. For instance, it is common place to use the word “Consideration” in a property transaction which actually means “some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other” (Currie v Misa [1875] LR 10 Ex 153). In a sale and purchase transaction of a house, one party is willing to give away his house in return for monies being paid by the other. The “consideration” is the money for the house.
Insurance
If you decide to go ahead and enter into a property transaction without the benefit of legal representation, any mistakes on your behalf would have to be borne by you and that may be costly. On the other hand, if your lawyer was negligent in representing your interests, you may sue your lawyer for damages arising out of their negligence. All lawyers, as far as in Malaysia are concerned, are required to be insured for their professional liabilities to cover instances such as negligence. This, at the very least, offers some form of pecuniary protection to a client in the event of professional negligence on the part of the lawyer in the handling of the file.
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