Do I have to use the estate agent's solicitors?
Estate agents often try and get you to use their preferred conveyancing solicitors and for many buyers they won't have previously worked with a solicitor and will appreciate the estate agent's referral in the hope that the process will be quicker.
This can also be the case with developers when you're buying a new build and the added time pressure of having to exchange within 28 days is a factor - it may seem that if you don't choose their preferred solicitor, your conveyancing may be derailed.
We have compiled a full list of all the tricks an estate agent can use and how to combat them. Read more - Estate agent tricks - How to spot and beat them!.
Why can't I be forced to use the estate agents solicitor?
The National Trading Standards Estate Agency Team state:
4.18 Here are some illustrative examples of aggressive practices. It is not an exhaustive list. In each case, the test is whether the average consumer's freedom of choice or conduct is (or would be likely to be) impaired and, as a result, they take (or would be likely to take) a different transactional decision....Pressurising a potential buyer to use associated services, for example to take out a mortgage through the in-house mortgage advisor or to use a particular firm of solicitors or licensed conveyancers."
An estate agent who willing refuses your offer based on your choice of solicitor is in breach of this code of conduct.
You may think it makes sense to use the estate agent's solicitor however these are three key reasons why you should not (also applicable to using your developer's preferred solicitor):
- the estate agent is instructed by the seller to sell their house in whatever condition it is in;
- the estate agent is paid a fee by the solicitor they are referring; and
- the estate agent is employed to sell the property for the highest price possible.
It is clear to see why it is in the best interests of the seller for you to use their chosen solicitor; however, it is clear there is a conflict of interest as a buyer is looking for a solicitor who:
- will find legal issues as to why you shouldn't buy the property;
- will help you buy the property at the current market price, not what the estate agent says it is worth; and
- is independent to everyone except you.
As a buyer, you should work with a solicitor independent from the seller and the selling estate agent or developer. The clear answer to the question "Can an estate agent force me to use their solicitor?" is not. You don't have to, and for various reasons, you might be better off choosing not to.
Pros and Cons of using the estate agent's solicitor versus online solicitor?
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An estate agent's recommendation of their approved solicitors has to be balanced with the referral arrangement. You should research reviews online - and elsewhere - to get an unbiased idea of how good a firm of conveyancing solicitors is. For some pointers read 8 Tips for Choosing the Best Conveyancing Solicitors.
As stated previously, any good conveyancing solicitor will work for a speedy conveyancing, having an attachment to an estate agent won't speed anything up.
This is linked to the previous point - choosing your own solicitor won't add to timescales - and this is getting near coercion.
You should ask the estate agent to transmit the memorandum of sale so that your appointed to solicitor can communicate with the vendor through their solicitor. Then you can communicate directly about pricing matters.
Estate agents are bound by The Property Ombudsman Code of Practice for Residential Sales, which is based on the Estate Agents Act 1979, which states that all bids must be passed onto a vendor without favour and in the order in which they are received.
Once again, the question of the agent breaching the law arises.
National Trading Standards (NTS) Guidance on Property Sales
The National Trading Standards' Estate Agency Team issued guidance on property sales in September 2015 which clearly sets out the duties which property professionals, particularly estate agents, must provide to consumers, what rights consumers and clients have and what redress they have.
You can access it by clicking on NTS Guidance on Property Sales but you should know that the guidelines are far-reaching and legally enforceable and breaches can be prosecuted in the criminal courts, resulting in possible jail terms and unlimited fines.
In particular, unfairness in practice, as defined in the guidance, is defined as results arising from the following:
- Giving false or misleading information to consumers ('misleading actions'), regardless of how delivered, whether verbally, in writing or via telephone;
- Hiding or failing to provide material information to consumers ('misleading omissions'); this can include not mentioning a serious problem with the title, failing to pass on offer details to a seller, failure to inform a buyer that a seller wishes a property to be marketed up to exchange of contracts, for example;
- Exerting undue pressure on consumers ('aggressive practices'); this includes pressuring a potential buyer to use associated services for example to take out a mortgage through the in-house mortgage advisor or to use a particular firm of solicitors or licensed conveyancers;
- Not acting with the standard of care and skill that is in accordance with honest market practice and in good faith (failing to show professional diligence); and
- Engaging in 'banned practice' – e.g. displaying a trust mark without authorisation/claiming to be a member of a professional body when this is not the case.
If you are experiencing what you think is undue pressure from your estate agent or developer to use their preferred solicitor and need advice, please call us on 0207 112 5388.
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
