LPC NOTES
[REGISTERED PROPERTY TRANSACTION PROCEDURE]
(2019-2020)
, REGISTERED PROPERTY TRANSACTION PROCEDURE - SELLER
1. Professional conduct
a. Acting for buyer and seller
i. Principles
1. uphold the rule of law and the proper administration of justice;
2. act with integrity;
3. not allow your independence to be compromised;
4. act in the best interests of each client;
5. provide a proper standard of service to your clients
6. behave in a way that maintains the trust the public places in you and in the provision of
legal services;
7. comply with your legal and regulatory obligations and deal with your regulators and
ombudsmen in an open, timely and co-operative manner;
8. run your business or carry out your role in the business effectively and in accordance with
proper governance and sound financial and risk management principles;
9. run your business or carry out your role in the business in a way that encourages equality of
opportunity and respect for diversity; and
10. protect client money and assets.
ii. Support principle 4 - O 3.5 – You do not act if there is a client conflict or a significant risk of
a client conflict unless the circumstances set out in O3.6 and 3.7 apply.
iii. Define client conflict (chapter 14 of the code) - any situation where you owe separate
duties to act in the best interests of two or more clients in relation to the same or related matters,
and those duties conflict, or there is a significant risk that those duties may conflict.
iv. Define conflict of interest – any situation where:
1. you owe separate duties to act in the best interests of two or more clients in relation to
the same or related matters, and those duties conflict, or there is a significant risk that those
duties may conflict (a "client conflict"); or
2. your duty to act in the best interests of any client in relation to a matter conflicts, or there is
a significant risk that it may conflict, with your own interests in relation to that or a related
matter (an "own interest conflict").
v. How does the solicitor make the choice? Outcome (3.3) requires the solicitor to
consider factors such as
1. whether there is a need to negotiate between the clients;
2. whether there is an imbalance in bargaining power between the clients; or
3. whether one of the clients is vulnerable.
vi. Guidance to achieve outcomes in chapter 3
1. IB 3.3 – declining to act for clients where you may need to negotiate on matters of
substance on their behalf, for example negotiating on price between a buyer and seller.
a. E.g. price, terms etc.
2. IB 3.4 – declining to act where there is unequal bargaining power between the clients
a. i.e. acting for seller and buyer where a builder is selling to a non-commercial
client.
vii. O3.6 - where there is a client conflict and the clients have a substantially common interest in
relation to a matter or a particular aspect of it, you only act if:
1. a. you have explained the relevant issues and risks to the clients and you have a
reasonable belief that they understand those issues and risks;
2. b. all the clients have given informed consent in writing to you acting;
, 3. c. you are satisfied that it is reasonable for you to act for all the clients and that it is in their
best interests; and
4. d. you are satisfied that the benefits to the clients of you doing so outweigh the risks.
viii. Define substantially common interest - a situation where there is a clear common purpose
in relation to any matter or a particular aspect of it between the clients and a strong consensus
on how it is to be achieved and the client conflict is peripheral to this common purpose.
ix. IB 3.11 – acting for two or more clients in a conflict of interests under O3.6 (substantially
common interest) where the clients’ interests in the end result are not the same.
1. Will show that you have not complied with the principles.
2. End result for one is to sell a property, the end result for the other is to purchase a
property.
x. O3.7 - where there is a client conflict and the clients are competing for the same objective, you
only act if:
1. a. you have explained the relevant issues and risks to the clients and you have a reasonable
belief that they understand those issues and risks;
2. b. the clients have confirmed in writing that they want you to act, in the knowledge that you
act, or may act, for one or more other clients who are competing for the same objective;
3. c. there is no other client conflict in relation to that matter;
4. d. unless the clients specifically agree, no individual acts for, or is responsible for the
supervision of work done for, more than one of the clients in that matter; and
5. e. you are satisfied that it is reasonable for you to act for all the clients and that the benefits
to the clients of you doing so outweigh the risks.
xi. Define competing for the same objective - any situation in which two or more clients are
competing for an "objective" which, if attained by one client, will make that "objective"
unattainable to the other client or clients, and "objective" means, for the purposes of Chapter 3,
an asset, contract or business opportunity which two or more clients are seeking to acquire or
recover through a liquidation (or some other form of insolvency process) or by means of an
auction or tender process or a bid or offer which is not public.
xii. IB 3.14 – acting for a buyer (including a lessee) and a seller (including a lessor) in a transaction
relating to the transfer of land for value, the grant or assignment of a lease or some other
interest in land for value.
1. Show you have not complied with the principles.
xiii. IB 3.5 – declining to act for clients under O3.6 and O3.7 where the clients cannot be
represented even-handedly, or will be prejudiced by lack of separate representation.
xiv. IB 3.12 – acting for two or more clients in a conflict of interests under O3.6 (substantially
common interest) where it is unreasonable to act because there is unequal bargaining power.
b. Contract race
i. O11.3 – 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.
ii. O4.1 – you keep the affairs of clients confidential unless disclosure is required or permitted by
law or the clients consents.
1. If seller refuse to allow solicitor to notify all the prospective buyers of contract
race, solicitor cannot disclose the contract race as he has a duty of confidentiality
to his client - must decline to act.
c. Withdrawal of papers
i. If draft contract sent to prospective buyer, then want to take second prospective
buyer – withdraw papers first then give to second.
, ii. Only one buyer is in possession of a draft contract at any one time, thus a contract
race does not exist and Outcome (11.3) of the Code does not apply.
d. When other party has no solicitor
i. The Legal Services Act 2007 - offence to carry on reserved legal activities through an
unqualified person.
1. Solicitor should write to unqualified person asking for satisfactory evidence that
no offence will be committed.
2. The solicitor’s client should also be informed of the situation.
3. Undertakings should not be accepted from unqualified persons - no method of
enforcing them.
4. Where seller represented by unqualified person has a mortgage to be discharged
at completion, the buyer’s solicitor must require the seller to produce a signed
Form DS1 (or receipted mortgage) at completion and must not accept an
undertaking for its discharge.
ii. Solicitor acting for a lender where the borrower is represented by an unqualified
person - under no obligation to undertake work which the buyer’s solicitor would
normally carry out and should not give the unqualified person additional assistance.
iii. When other party is unrepresented –
1. Solicitor under a duty in conduct to act in best interests of his client (Principle 4).
2. but also to act with integrity (Principle 2) and not to take unfair advantage of third
parties in either a professional or personal capacity (Outcome (11.1)).
3. Where two or more Principles come into conflict, the Introduction to the SRA
Code of Conduct states that the one that takes precedence is the one which best
serves the public interest in the particular circumstances.
e. Money laundering
i. The Money Laundering Regulations 2007 place obligations on ‘relevant persons’ –
defined in reg 3:
1. A firm or sole practitioner who by way of business provides legal or notarial services to
other persons, when participating in financial or real property transactions.
ii. Reg 20 - A firm must have internal procedures in place for the identification and
reporting of money laundering.
iii. reg 20(2)(d)(i) - firms appoint person to act as a ‘nominated officer’- ‘Money
Laundering Reporting Officer’ (MLRO).
iv. Reg 7 - firms obliged to obtain verification of the identity of each of their clients.
v. Reg 9 - The verification must take place before a business relationship is established
and before an occasional transaction can be carried out.
1. may verify the identity during the establishment of a business relationship if:
a. (a) there is little risk of any money laundering or terrorist financing occurring;
b. (b) it is necessary not to interrupt the normal course of business; and
c. (c) the identity is verified as soon as possible.
2. However, the solicitor cannot:
a. (a) carry out a transaction with or for the client through a bank account; or
[REGISTERED PROPERTY TRANSACTION PROCEDURE]
(2019-2020)
, REGISTERED PROPERTY TRANSACTION PROCEDURE - SELLER
1. Professional conduct
a. Acting for buyer and seller
i. Principles
1. uphold the rule of law and the proper administration of justice;
2. act with integrity;
3. not allow your independence to be compromised;
4. act in the best interests of each client;
5. provide a proper standard of service to your clients
6. behave in a way that maintains the trust the public places in you and in the provision of
legal services;
7. comply with your legal and regulatory obligations and deal with your regulators and
ombudsmen in an open, timely and co-operative manner;
8. run your business or carry out your role in the business effectively and in accordance with
proper governance and sound financial and risk management principles;
9. run your business or carry out your role in the business in a way that encourages equality of
opportunity and respect for diversity; and
10. protect client money and assets.
ii. Support principle 4 - O 3.5 – You do not act if there is a client conflict or a significant risk of
a client conflict unless the circumstances set out in O3.6 and 3.7 apply.
iii. Define client conflict (chapter 14 of the code) - any situation where you owe separate
duties to act in the best interests of two or more clients in relation to the same or related matters,
and those duties conflict, or there is a significant risk that those duties may conflict.
iv. Define conflict of interest – any situation where:
1. you owe separate duties to act in the best interests of two or more clients in relation to
the same or related matters, and those duties conflict, or there is a significant risk that those
duties may conflict (a "client conflict"); or
2. your duty to act in the best interests of any client in relation to a matter conflicts, or there is
a significant risk that it may conflict, with your own interests in relation to that or a related
matter (an "own interest conflict").
v. How does the solicitor make the choice? Outcome (3.3) requires the solicitor to
consider factors such as
1. whether there is a need to negotiate between the clients;
2. whether there is an imbalance in bargaining power between the clients; or
3. whether one of the clients is vulnerable.
vi. Guidance to achieve outcomes in chapter 3
1. IB 3.3 – declining to act for clients where you may need to negotiate on matters of
substance on their behalf, for example negotiating on price between a buyer and seller.
a. E.g. price, terms etc.
2. IB 3.4 – declining to act where there is unequal bargaining power between the clients
a. i.e. acting for seller and buyer where a builder is selling to a non-commercial
client.
vii. O3.6 - where there is a client conflict and the clients have a substantially common interest in
relation to a matter or a particular aspect of it, you only act if:
1. a. you have explained the relevant issues and risks to the clients and you have a
reasonable belief that they understand those issues and risks;
2. b. all the clients have given informed consent in writing to you acting;
, 3. c. you are satisfied that it is reasonable for you to act for all the clients and that it is in their
best interests; and
4. d. you are satisfied that the benefits to the clients of you doing so outweigh the risks.
viii. Define substantially common interest - a situation where there is a clear common purpose
in relation to any matter or a particular aspect of it between the clients and a strong consensus
on how it is to be achieved and the client conflict is peripheral to this common purpose.
ix. IB 3.11 – acting for two or more clients in a conflict of interests under O3.6 (substantially
common interest) where the clients’ interests in the end result are not the same.
1. Will show that you have not complied with the principles.
2. End result for one is to sell a property, the end result for the other is to purchase a
property.
x. O3.7 - where there is a client conflict and the clients are competing for the same objective, you
only act if:
1. a. you have explained the relevant issues and risks to the clients and you have a reasonable
belief that they understand those issues and risks;
2. b. the clients have confirmed in writing that they want you to act, in the knowledge that you
act, or may act, for one or more other clients who are competing for the same objective;
3. c. there is no other client conflict in relation to that matter;
4. d. unless the clients specifically agree, no individual acts for, or is responsible for the
supervision of work done for, more than one of the clients in that matter; and
5. e. you are satisfied that it is reasonable for you to act for all the clients and that the benefits
to the clients of you doing so outweigh the risks.
xi. Define competing for the same objective - any situation in which two or more clients are
competing for an "objective" which, if attained by one client, will make that "objective"
unattainable to the other client or clients, and "objective" means, for the purposes of Chapter 3,
an asset, contract or business opportunity which two or more clients are seeking to acquire or
recover through a liquidation (or some other form of insolvency process) or by means of an
auction or tender process or a bid or offer which is not public.
xii. IB 3.14 – acting for a buyer (including a lessee) and a seller (including a lessor) in a transaction
relating to the transfer of land for value, the grant or assignment of a lease or some other
interest in land for value.
1. Show you have not complied with the principles.
xiii. IB 3.5 – declining to act for clients under O3.6 and O3.7 where the clients cannot be
represented even-handedly, or will be prejudiced by lack of separate representation.
xiv. IB 3.12 – acting for two or more clients in a conflict of interests under O3.6 (substantially
common interest) where it is unreasonable to act because there is unequal bargaining power.
b. Contract race
i. O11.3 – 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.
ii. O4.1 – you keep the affairs of clients confidential unless disclosure is required or permitted by
law or the clients consents.
1. If seller refuse to allow solicitor to notify all the prospective buyers of contract
race, solicitor cannot disclose the contract race as he has a duty of confidentiality
to his client - must decline to act.
c. Withdrawal of papers
i. If draft contract sent to prospective buyer, then want to take second prospective
buyer – withdraw papers first then give to second.
, ii. Only one buyer is in possession of a draft contract at any one time, thus a contract
race does not exist and Outcome (11.3) of the Code does not apply.
d. When other party has no solicitor
i. The Legal Services Act 2007 - offence to carry on reserved legal activities through an
unqualified person.
1. Solicitor should write to unqualified person asking for satisfactory evidence that
no offence will be committed.
2. The solicitor’s client should also be informed of the situation.
3. Undertakings should not be accepted from unqualified persons - no method of
enforcing them.
4. Where seller represented by unqualified person has a mortgage to be discharged
at completion, the buyer’s solicitor must require the seller to produce a signed
Form DS1 (or receipted mortgage) at completion and must not accept an
undertaking for its discharge.
ii. Solicitor acting for a lender where the borrower is represented by an unqualified
person - under no obligation to undertake work which the buyer’s solicitor would
normally carry out and should not give the unqualified person additional assistance.
iii. When other party is unrepresented –
1. Solicitor under a duty in conduct to act in best interests of his client (Principle 4).
2. but also to act with integrity (Principle 2) and not to take unfair advantage of third
parties in either a professional or personal capacity (Outcome (11.1)).
3. Where two or more Principles come into conflict, the Introduction to the SRA
Code of Conduct states that the one that takes precedence is the one which best
serves the public interest in the particular circumstances.
e. Money laundering
i. The Money Laundering Regulations 2007 place obligations on ‘relevant persons’ –
defined in reg 3:
1. A firm or sole practitioner who by way of business provides legal or notarial services to
other persons, when participating in financial or real property transactions.
ii. Reg 20 - A firm must have internal procedures in place for the identification and
reporting of money laundering.
iii. reg 20(2)(d)(i) - firms appoint person to act as a ‘nominated officer’- ‘Money
Laundering Reporting Officer’ (MLRO).
iv. Reg 7 - firms obliged to obtain verification of the identity of each of their clients.
v. Reg 9 - The verification must take place before a business relationship is established
and before an occasional transaction can be carried out.
1. may verify the identity during the establishment of a business relationship if:
a. (a) there is little risk of any money laundering or terrorist financing occurring;
b. (b) it is necessary not to interrupt the normal course of business; and
c. (c) the identity is verified as soon as possible.
2. However, the solicitor cannot:
a. (a) carry out a transaction with or for the client through a bank account; or
