The Investment Property Forum has launched a UK Protocol aiming to offer investment agents clear guidance on potential conflicts of interest. The protocol sets out best practice on multiple introductions and dual agency, and in particular stresses the importance of a “clear and robust ‘barrier policy’”, to keep individual agents in large organisations on separate sides of introductions or deals. JLL, Knight Frank, CBRE and Savills have all signed up.
The protocol reflects the established position for solicitors who are bound by their professional conduct rules not to act for both buyer and seller, or landlord and tenant. In very occasional circumstances, solicitors in Scotland may act for both sides of one transaction but subject to strict requirements as to the division of teams and the security of information.
One best behaviour for all to remember – clients, agents and lawyers alike - is outcome 11(3) of the Solicitors Code of Conduct 2011. Commonly referred to as the “contract race” rule this rule has become stricter with each edition of the Code so that it now reads “where you act for a seller of land, you inform all buyers immediately of the seller’s intention to deal with more than one buyer”. This solicitor’s duty applies long before the issuing of contracts, and whenever there is more than one deal being done for a particular property, for example a tenant agreeing terms with an assignee whilst at the same time negotiating with its landlord to surrender the lease. So as soon as your lawyer knows that you intend to deal with more than one buyer, he/she will be obliged to tell all the buyers involved that this is the case. If you don’t want the potential buyers to know, please don’t tell your lawyer.