Council's Recent Rulings on Conveyancing Practice

Conveyancing Practice Rulings & Directions

Solicitor's Finder's Fee

Solicitors Doubling or Acting as Housing Agent
In the Practice Ruling and Direction entitled Solicitors Doubling or Acting as Housing Agent, the Council ruled as follows:

It is not only a tradition but an article of faith of the Bar that the honour and dignity of the profession should at all times be maintained.
In the view of the Council, carrying on the business of a housing agent in tandem with that of a lawyer would not be compatible.
The provisions of section 83 of the Legal Profession Act which deals with the disciplining of members of the Bar states that the advocate and solicitor may be struck off or suspended for cause such as:

1. if he carries on by himself or any person in his employment any trade, business or calling that detracts from the profession of law or is in any way incompatible with it, or is employed in any such trade, business or calling. [Subsection (2) para (i).]

The calling of a housing agent, 'broker' in common parlance, would detract from the honour and dignity of the Bar. The Council is therefore of the opinion that the business of a housing agent is incompatible with that of an advocate and solicitor.

The Council has re-considered this Practice Ruling and Direction and now announces the following changes:

If, in the course of the practice of the advocate and solicitor (the 'solicitor'), the opportunity arises for the solicitor to make an agreement with a prospective vendor or purchaser, that if the solicitor can secure a purchaser or vendor (as the case may be), the solicitor will be paid a commission as a finder's fee, 'broking' a deal in such circumstances would not necessarily detract from the honour and dignity of the Bar and the solicitor is not prohibited from doing so (the 'Amended Rule').

However, the solicitor must at all times observe the following qualifications to the Amended Rule:

1. where, in addition to securing the purchaser/vendor, the solicitor goes on further to act in the conveyancing transaction, the solicitor will not be entitled to the benefit of the Amended Rule, which will no longer apply, and the solicitor must comply strictly with the provisions of rule 14 of the First Schedule of the Legal Profession (Solicitors' Remuneration) Order.
2. the Amended Rule is not meant to permit and is not to be read as permitting a solicitor to carry on the business of a housing agent in tandem with his law practice. The carrying on the business of a housing agent in tandem with that of a lawyer continues to be prohibited.

The following definition taken from the Appraisers and House Agents Act (Cap 16) is a starting guide as to what activities would constitute the carrying on of the business of a housing agent:

Definition of house agent

3 Every person, firm or company who -

(a) as an agent for any other person, for or in expectation of any fee, gain or reward of any kind, advertises for sale or letting any furnished house or part of any furnished house;
(b) by any public notice or advertisement or by any inscription in or upon any house, shop or place used or occupied by him, or by any other ways or means, holds himself out to the public as an agent for selling or letting furnished houses; or
(c) lets or sells or makes or offers or receives any proposal or in any way negotiates for the selling or letting of any furnished house or part of any furnished house,

shall be deemed to be a person using and exercising the business, occupation and calling of a house agent, and shall be a house agent within the meaning of this Act.

In general, the solicitor must not, by any public notice or advertisement or by any inscription in or upon any house, shop or place used or occupied by him, or by any other ways or means, hold himself out to the public that he is in the business or he provides the service of broking property deals and the solicitor must certainly not take to showing properties to prospective purchasers/tenants and such others.

This ruling came into effect on 1 August 2001.

Amendment to Practice Directions on Legal Costs for CPF Conveyancing Matters Dated 20 November 1999
The Council of the Law Society directs that the Practice Directions on Legal Costs for CPF Conveyancing Matters which was published on 20 November 1999 be hereby amended as follows:

1. The existing paragraph 'L' be re-numbered as paragraph 'L(1)', which will thus read:

L(1) Where the Member applies to the CPF Board for the CPF Board's consent for the registration of documents against the property and a Production Form is required eg Notice of Death, Severance of Joint Tenancy, Mortgage, etc

Legal fee chargeable by the CPF solicitor: $50. However, this fee is chargeable only if none of the legal fees prescribed under the foregoing paragraphs applies.

2. The following new paragraph L(2) be added immediately after the said paragraph L(1):

L(2) Where the Member applies to the CPF Board for CPF Board's consent for the registration of documents (eg Notice of Death, Severance of Joint Tenancy, Mortgage, etc) against the property and both: (a) a Production Form is required; and (b) the title deeds to the property are required to be produced by the CPF Board.

Legal fee chargeable by CPF solicitor: $75. However, this fee is chargeable only if none of the legal fees prescribed under the foregoing paragraphs applies.

This practice direction came into effect on 20 June 2001.