In the dynamic realm of real estate transactions, it’s important for individuals to safeguard their own best interests. However, a recent news piece by ABC News showed just how difficult this can be. The article discussed the issues that might arise when one lawyer represents both a seller and buyer in a property translation. It provided a cautionary tale drawn from one woman’s personal experience and serves as an important reminder of the potential pitfalls that can arise when a single law firm represents both the buyer and seller in a property transaction. Here New South Lawyers’ Property Lawyers weigh in on the debate: “Can one lawyer represent both parties in the same matter?” (And should they).

The Dual Representation Dilemma 

While Australian law permits a single law firm to handle both sides of a property deal, legal experts overwhelmingly caution against this practice due to its inherent risks. The saga of Queensland woman Christine Anderson shows how a property exchange that seems simple can swiftly evolve into complex scenarios when a single firm tries to cater to the interests of both parties.

Facts of the matter

Against the backdrop of the COVID-19 pandemic, Christine Anderson's decision to part ways with her family home and embark on a nomadic journey seemed like a straightforward move. She trusted a long standing law firm, with whom she had successful prior dealings, to oversee the intricacies of the sale. When the firm proposed they represent both her interests as a seller and those of the buyer, Anderson agreed, buoyed by her previous positive encounters with the firm.

The issues that emerged

However, Anderson's optimism quickly waned as disputes surfaced over various aspects of the property deal. The situation escalated, leading to feelings of concern and stress, causing her to question her decision to allow dual representation. Anderson's narrative offers a clear perspective on potential conflicts of interest and complexities that can materialise when a single law firm attempts to balance the often disparate interests of both buyers and sellers. The potential for conflicts in property sales is substantial. For that reason, at New South Lawyers, we  advise clients to abstain from the use of one lawyer who represents both sides - stressing that doing so ensures each party's interests are vigilantly protected.

A Balancing Act

While the drawbacks of dual representation are evident, there is actually technically no across-the-board prohibition or rigorous crackdown on law firms engaging in this type of representation. The decision rests with the lawyers themselves.

However, at New South Lawyers our Property Law team is clear in their counsel against the practice. We emphasise the difficulty of intricately balancing the needs of both parries and delivering unbiased representation to both parties while preserving confidentiality.

Lessons Learnt

Christine Anderson's story serves as a potent reminder to future property buyers and sellers to meticulously consider potential conflicts and potential hazards linked to dual representation - and instead opt for independent legal representation to ensure their best interests are never compromised. It illuminates the intricacies and vulnerabilities inherent in property transactions when a single law firm attempts to balance the interests of both parties.Despite its legality, the underlying potential for conflicts, compromised confidentiality, and skewed results renders dual representation a practice that is heavily discouraged by legal experts. Therefore, if you are looking to buy or sell a property the wise path for this remains clear: seek distinct legal representation (such as the advice of an experience member of our own Property Law team) for each party, to ensure a fair and equitable transaction for all stakeholders involved.

New South Lawyers’ communications are intended to provide commentary and general information. To that end, people should not rely on this communication as legal advice. Accordingly, they should seek formal legal advice for matters of interest arising from this communication.

To find out more, chat with a member of the New South Lawyers Property Law Team today.