When buyer, seller share a lawyer

There are occasions when a buyer and a seller of property opt to use one lawyer for the transaction. It mainly happens when both parties have mutually negotiated and agreed on details of the contract, including payment of legal fees.

It is normal for a lawyer to act for both parties in a property transaction.

Advocates being admitted to the bar by Chief Justice Willy Mutunga take their oath at the Supreme Court in this file photo. While a lawyer can represent both buyer and seller in a transaction, it is a tough balancing act. (PHOTO: FILE / STANDARD)

However, it is professional for the lawyer to disclose the same to both parties and they must mutually accept that he will not give one client advice against the interests of another.

Moreover, they should understand that the lawyer might not be able to give all the information relevant to the matter to both parties and ought to accept the arrangement.

Conveyancers may also have similar obligations of disclosure to the client who should agree on the professional engagement in writing.

Many of the transactions have gone smoothly but some have also hit the rocks, leading to disputes in court. However, there are some lawyers who prefer not to represent both clients because of the high probability of a conflict of interest.

 Complications

They believe that even if a lawyer stays impartial and stands on the side of justice, the aggrieved might feel that he protected the other party. Moreover, even straightforward conveyancing transactions can develop unexpected complications down the road, leading to settlements in court.

For instance, in the case of Francis Mugo & Others vs James Bress Muthee & Others Civil Suit No: 122 of 2006, a lawyer was disqualified from representing the plaintiffs when it emerged that the defendants intended to call him as a witness on a lease he had drafted between the parties.

In the case of Uhuru Highway Development Ltd vs Central Bank of Kenya (2002) 2 EA 654, the court observed that “there is a likelihood for an advocate who had prepared the charge document to consciously or unconsciously or even inadvertently use the confidential information acquired during the preparation of the charge. There will no doubt be prejudice”.

Other cases include Kagunyi vs Gathua & Another (2008) 2 Klr, and King Woolen Mills Ltd & Another vs Kaplan & Stratton Advocates (1990-1994) 1 E.A. 224 (Cak).

The decided cases are not against one lawyer representing both parties, but there are occasions when the professional involvement may amount to conflict of interest.

It may be tricky to look out for the best interests of both the seller and purchaser if any dispute arises between the two parties. Confusion would arise when there is a breach of agreement and the lawyer is supposed to testify in favour of one party.

Even without a dispute, there could be a likelihood that a conflict of interest could arise if the buyer were to decide to take possession of the property before completing payment.

 Tricky

It would also be tricky for the same lawyer to advise the seller that the arrangement was not in his or her best interests as the interests of the buyer are also involved.

In some cases, either of the clients may feel that their interests are not wholly catered for as the lawyer may be trying to balance their needs by walking a tight rope.

Professionally, it is essential for both the buyer and seller to receive comprehensive legal advice regarding their rights and regulations in any conveyancing transaction.

It has been argued in some quarters that if both parties choose the same lawyer, they may only receive assistance through basic conveyancing procedures.

They are unlikely to receive the level of professional care and advice that they would with their own conveyancing professional.