Acting for both seller and buyer of a residential property (SRA Code of Conduct, para 6.2)
Nkechi Obi, a solicitor in England, acts for Martin Haldane on the sale of his house in Reading. Martin has agreed a price of £465,000 with Sunita Varma, a first-time buyer he met through an estate agent; they are not related and have never met before. Sunita asks Nkechi to act for her on the purchase as well, saying it would save time and money. Both Martin and Sunita are willing to sign a written consent to Nkechi acting for both of them.
Which of the following best describes whether Nkechi may act for Sunita as well as Martin?
Choose one answer to see the reasoning.
Worked answer
Correct answer C: She must not act for Sunita, because seller and buyer have conflicting interests and neither have a substantially common interest nor are competing for the same objective.
THE RULE TO REMEMBER
A solicitor must not act where clients' interests conflict unless they have a substantially common interest or are competing for the same objective, and then only with informed written consent and safeguards.
Acting for both seller and buyer of a residential property (SRA Code of Conduct, para 6.2)
Paragraph 6.2 of the SRA Code of Conduct for Solicitors prohibits acting in relation to a matter where there is a conflict of interest, or a significant risk of one, unless one of two exceptions applies: the clients have a substantially common interest in the matter, or they are competing for the same objective. Only if an exception applies do the further conditions matter: written informed consent, appropriate safeguards for confidential information, and the solicitor being satisfied it is reasonable to act. A seller and buyer at arm's length have opposing interests on many points that remain live after the price is agreed, such as the contract terms, replies to enquiries, title defects, the deposit and the completion date. They are not pursuing a shared goal, and they are not rival bidders for the same asset. Neither exception applies, so the consent conditions are never reached and Nkechi must decline to act for Sunita.
Why A is wrong: Informed written consent is only one of the conditions that apply once an exception is met; it cannot by itself cure a seller/buyer conflict.
Why B is wrong: Paragraph 6.2 applies to the firm's acting; separate fee earners or an information barrier do not create an exception where none applies.
Why D is wrong: Agreeing the price does not remove the conflict; contract terms, title, enquiries and completion arrangements remain contested.
Why E is wrong: A conflict between seller and buyer exists whether or not there is a mortgage; the lender's position is irrelevant to this conflict.
A little more practice done.
Related questions
Acting for seller and buyer of a flat where terms are still to be negotiated (Code 6.2)
Which of the following best describes whether the firm may act for both?
Acting for clients competing for the same objective (SRA Code 6.2)
Which of the following best describes whether the firm may act for both clients?
Acting for buyer and lender when the buyer hides a cash-back from the lender (Code 1.4, 6.2)
Which of the following best describes the solicitor's position?
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