Conveyancing Corruption - Lawyers Too!

Published 24 November 08 07:27 PM | Peter Mericka 

OPINION
by Tim O'Dwyer M.A., LL.B
Solicitor
Consumer Advocate
watchdog@argonautlegal.com.au

(Following on from "Licensed Conveyancer Corruption Must Be Stopped", Tim O'Dwyer reports on a lawyer conveyancer's attempt to attract referrals from real estate agents. Readers are also referred to Tim's posting Catch 32 On Solicitors' Independence regarding estate agent referrals to lawyers.)

After the principal of a small suburban law firm sent an email touting his services to several real estate agents, one agent passed it on to a solicitor friend with a caustic comment. That solicitor sent both the email and the comment onto another solicitor who, in turn and disgust, flicked both on to me.

Here is that incredible and appalling email:

"Hello again friends.

Two emails from me in as little as one week, I promise I won't make a habit of it.

I just wanted to tout my services to you to and ask you to consider recommending our services to your clients. I have thought long and hard about offering you some incentive to do this and what I have come up with is this offer. (You can decide whether it's a 'special' offer or not.)
If you send your clients to me, each time you do so I will give you either a voucher which will entitle you personally (or your client if you wish to pass it on to them) to a 30 percent discount off our normal fee when you buy or sell. That is – one voucher for each referral. The only catch is that the client must not only decide to use our services but the matter must settle. This is because we generally don't charge a fee if the matter falls over, except in extreme circumstances where the file has given me an ulcer.

To let you in on a little secret – your profession is a major source of referrals for us, and with out blowing my own trumpet ( I don't know why I said that because I am about to), this is because your profession likes dealing with me...

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Filed under: Conveyancer, secret commissions, queensland, referral fee, corruption, touting, kick-back

Comments

# Austin said on December 1, 2008 9:36 AM:

It's funny, he boasts that he can spell 'conveyance' but he can't spell 'weight'.

A broad legal question - is a lawyer legally obliged to withold any information from clients or are they obliged to disclose every piece of available information they have?

# Peter Mericka said on December 1, 2008 11:09 AM:

Hi Austin,

The broad answers are "No" and "Yes".  I'm sure you're leading onto something.  Do you have a follow-up question?

# Chris said on December 2, 2008 11:23 PM:

"Everything is fair in love and war" - I guess they forgot to mention the recession. This is getting scary, I mean what's next?

# Peter Mericka said on December 3, 2008 5:21 AM:

Hi Chris,

I am sure that that's the attitude of those who engage in client trafficking, but the reality is that it is unethical, illegal and corrupt.

The regulators have done nothing about the problem, and I think this blog is the only place it's discussed.

# jodi said on December 4, 2008 4:07 PM:

i think this blog is the only place issues of any relevance to consumers in the real estate market get discussed. more people should read it & educate themselves & their friends on how not to get 'duped' suckered or exploited by their new best friends, who also happen to have a legal interest in their house...

# Austin said on December 5, 2008 11:09 AM:

Peter, my bank manager told me always to sign 'subject to finance', as this blog as also advised. However this can't be done at auction - can it?

# Peter Mericka said on December 5, 2008 11:37 AM:

Yes and no.  Yes, it can be done, but the estate agent will say they won't do it.

The way to do it at auction is to tell the auctioneer, prior to the auction that you will be bidding on the proviso that a finance condition is to be added to the contract.  This is the case with any other condition you may want to add.  Expect the estate agent to perform some ritual incantations about the sacred auction, but in a buyer's market you're the boss.

Alternatively, wait until the property is passed in (as most are these days), let the auctioneer and vendor know that you're prepared to pay more than the last bidder (to get rid of the silly "right of first negotiation"), and then enter into negotiations and include the finance condition.