The Gazette 1973

report;

(g) that the solicitor is satisfied from the examinations

of the document specified in Part 5 of the schedule and

from the investigation that the customer has a good

marketable title.

The Council having examined the forms of certificate

and report were of the opinion that there is no objec-

tion to the detailed form required by the Allied Irish

group. However, paragraph (b) above which certifies

that there are no leases, sub-leases, etc., other than those

disclosed should be amended by a statement that this is

based on information supplied by the client. There can

be no assurance that a client would not have leased or

sub-leased property without the knowledge of the solici-

tor even where the original title deeds are in the solici-

tor's possession. Subject to this the Council see no

objection to the form of solicitor's report and certificate

of title used by the A.I.B. group or to the form used by

the Bank of Ireland but members are warned as to the

liability which they incur in making these reports. If a

solicitor accepts responsibility for this work he is legally

liable for any error or mistake which might fall under

the heading of negligence.

In one respect the form used by the Allied Irish Bank,

although covering everything that is required by the

Bank of Ireland report, is unique in that it draws the

attention of solicitors to a number of matters upon

which their advice is required. Each report contains a

statement that from the investigation made into the

title the customer has a good marketable title to the

property. This is properly solicitors' work and should be

properly remunerated by the banks requiring the reports.

DELAYED LOANS BY BUILDING SOCIETIES

A member wrote to the Society stating that he acted for

a client who had agreed to purchase a new house in a

building estate near Dublin. To enable him to complete

the purchase he was obtaining a loan from a Dublin

building society.

The loan was approved on the usual conditions by

the building society and in due course the title docu-

ments were sent to the building society's solicitors.

Ultimately after the outstanding points on title had

been dealt with our member requested that the loan

cheque be issued. At an early stage the client was

anxious to go into possession of the house with bridging

finance from the bank pending receipt of the loan

cheque. Notwithstanding the various requests which had

been made to make an appointment to complete the

mortgage our member has been informed by the buil-

ding society's solicitors that they cannot give any indi-

cation when the loan cheque will be issued.

The client has now received a letter from his bank

manager indicating that he is being pressed by the

directors for repayment of the amount advanced by

way of a bridging loan. He has given the client a period

of two weeks within which to clear up the outstanding

overdraft and has indicated that if the matter has not

been resolved by then the matter would be taken out

of his hands for collection purposes.

The situation caused by delayed advances by buil-

ding societies is obviously one which imposes great

hardship on the client and imposes a duty on the soli-

citor to warn the client of the danger of dealing with

any building society which is slow in making advances

after the necessary title formalities have been completed.

Where a solicitor is aware that a particular society

falls into this category it is recommended that a letter

be sent to the client at an early stage of the transaction

warning him of the possible consequences of dealing

with the particular society unless there is a firm assur-

ance that the money will be forthcoming as soon as the

title has been cleared. It is also essential to warn the

client if it is anticipated that the solicitor for the buil-

ding society will take more than the normal period

approximately one month to clear the title.

solicitor

who omits to give such a warning to the client might

conceivably be held responsible to the client, although

this is a matter of opinion. The majority of the buil-

ding societies co-operate fully with the profession and

no difficulty arises and it is to deal with the case of any

building society which is slow in clearing the title or in

making the advance once the title has been cleared that

this warning is issued to the profession.

GAZUMPING

In the April issue of the Society's

Gazette

at page 82 a

report appeared of a case in which a member sought

advice as to the propriety of sending out several con-

tracts on the instructions of the client to various poten-

tial purchasers and getting them to sign the contracts

after negotiating the maximum price with each pur-

chaser and subsequently accepting the contract with the

highest price and refusing the offers made by the

remaining parties.

This practice which has become known in England

as gazumping was held to be unprofessional and was

disapproved strongly by the Council. It was stated that

in order to prevent this practice members should adopt

the procedure of exchanging contracts so that neither

party will be bound until the other party has signed his

part of the contract.

Having again considered the matter the Council

wish to bring the matter a stage further. It is the con-

sidered view of the Council that where a solicitor for a

vendor issues more than one contract for the same

property he should at least make it known to the soli-

citors to whom these contracts are being issued that

contracts in similar terms have or are being sent to other

purchasers. If this is done the purchasers solicitors

would then realise and could convey to their clients

that the first contract returned signed would probably

be the one accepted by the vendor. This recommen-

dation is in addition to the statement in the last issue

of the Society's

Gazette

and mentioned above.

110