Property Report: Choosing a conveyancing attorney

When choosing a conveyancing attorney to facilitate the sale of a property, often one of the foremost factors is choosing the person/company who will provide the quickest and smoothest transfer in the least amount of time with minimum hassles.

Ask friends or family who they would use based on experience, as this is often a good indicator, but there are certain insurance/protection factors which also need to be verified.

Many years ago, the Attorneys Fidelity Fund (AFF) implemented an insurance policy (Attorneys Insurance Indemnity Fund) whereby attorneys were covered against certain claims made against them by their clients. Attorneys were covered for professional negligence and the funds paid into the Attorney’s Trust Account (or entrusted to the attorney) were covered in case they should ever go missing. Due to the high number of claims, the AFF then changed the policy and only covered funds which remained in the Trust Account. If the funds were invested on the client’s behalf (with the client’s permission) in an interest bearing account, then they lost their cover. The reasoning was that if a client wanted to earn interest on the money, the client had to take the risk of it going missing.

However there was also a problem with this policy as it only covered a maximum of R1,562 500 per period of insurance. In essence this is not a great deal of money, considering the amounts of money actually being deposited with attorneys or the value of the number of registrations being handled by them. To overcome this, most prudent attorneys usually (but are not required to) decide to take out additional cover from a reputable insurance company. Below are two products:

Professional Indemnity Insurance; which covers the attorney inter alia against their own negligence in conducting matters, and Misappropriation of Trust Monies.

In small attorney companies the risk of theft of Trust Funds is usually very low or non-existent so often these companies choose not to take cover. Additionally, this cover can turn out to be quite expensive per annum. However it should be noted that from July 1, 2016 the AFF once again amended their policy to exclude misappropriation or unauthorised borrowing of any money or other property belonging to a client or third party. The fund will now only cover professional negligence.

This means that it is imperative that the firm a seller chooses to deal with must be sufficiently covered, just in case anyone at the firm does “dip their fingers in the till” or handles a matter in a negligent manner, thereby giving rise to a professional negligence claim. A seller or any client should check to see that the legal company has taken appropriate measures to protect deposits and monies.

When deciding which conveyancing firm to choose, ask which ones your estate agent would recommend. Estate agents place the fate of their deal in the conveyancer’s hands and they will have experienced many registrations, both smooth and eventful. Not only does the conveyancing firm control the sellers and buyers funds during the property transaction, they also control the agent’s commission, which is their livelihood. Estate agents therefore have a vested interest to work with conveyancing attorneys that they can trust and can often offer insight or a guide as to which conveyancing firms have the most experience in a particular field or have the most experience when it comes to complicated registration scenarios.

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