The legal services watchdog has seen a significant increase in allegations of misconduct by lawyers in real estate transactions.
A new report reveals that a large number of complaints have been filed by banks about lawyers who have not fulfilled commitments related to real estate transactions.
The question was previously a major feature of the Law Society’s investigations following the 2007-2008 financial crash.
Lawyers regularly engage with banks to take on certain tasks related to the purchase of a property by their client.
For example, this could include stamping and recording the transaction in order to give the necessary security to the mortgage.
But a report from the Legal Services Regulatory Authority (LSRA) reveals that it received 123 complaints of breach of commitments between late March and early September – a fifth of all complaints received during that time. In comparison, there were only 56 engagement complaints in the previous six months, and 31 and 39 in each of the previous reporting periods.
A banking industry source said the rise could be linked to Ulster Bank and KBC ‘looking at their accounts’ ahead of their exit from the Irish market. However, no bank would comment.
The LSRA said it was informed by a bank, which it did not identify, that the bank had identified 400 cases where it believed lawyers had failed to honor their commitments.
Failure to keep a pledge is considered fault and can lead to problems for home buyers, especially when the owner is looking to sell the property.
Bank of Ireland did not specify the number of complaints it had filed. In a statement, he said: “Delays in meeting commitments, which are a key part of the divestiture process, impact the parties in any divestiture transaction. When we have a complaint, we follow normal procedure and the parties engage in a professional manner with the LSRA.
Allied Irish Bank declined to comment.
Between April and September, two complaints for non-compliance with commitments and two for non-recording of purchases were referred to the new Disciplinary Court of Jurists, which deals only with the most serious complaints.
It can impose a series of sanctions going as far as recommending to the High Court the striking off of a practitioner.
In the report, the LSRA warned lawyers of the importance of ensuring that commitments are met on a timely basis and that correspondence from banks following outstanding commitments is not ignored.
In a statement, the Bar said it “expects all lawyers to comply with legal and public obligations in all areas to ensure that the ethical principles guiding our profession are maintained at the highest level.” .
Earlier this year, the company’s chief regulatory officer, John Elliot, issued a notice saying the company continues to receive a significant number of business complaints. He warned lawyers that not only did it take time to process a complaint, it could also involve a large financial claim.