Can you choose your own property solicitor? Many salespeople will tell you 'No' but it's important to know when you can and why you should... or shouldn't. Here's the 3 things to consider before choosing either way, sometimes it's in your interests to go along with it but here's the reasons why it may not be...
Hey guys. Property search... Think Gladfish. I'm Brett Alegre-Wood and this is Property Rant.
So today, what I wanted to cover was, can you use your own solicitor?
So, a lot of times when we buy a property or when we buy a hotel room or we buy an investment of some sort, whether it be alternative or whatever it is, we're told that we have to use the solicitor that the sales company allocates. And do we have to stand for that? The answer is no, you don't. But by the same token, does the company selling it have to sell you the property then? And no, they don't.
So there's a lot of benefits in using the solicitor because they're obviously familiar with the contracts. And look, most, well, all solicitors should have PI insurance. Otherwise, they shouldn't really be practicing. And certainly, if they're on the Solicitor's Regulatory Authority, they're checked up on and all that sort of stuff. So they're the sort of things you can check and make sure because technically, all solicitors should be relatively the same but they're not.
And this is one of the keys to this. If you're going to use the sales company's solicitor, and it's the first time you're using him, you haven't got a level of trust, you know you don't them, then just inquire of them, ask them, are they part of the Solicitor's Regulation Authority. Do they have PI cover or to what levels? How experienced are they in actually conveying or doing the conveyance or the transfer of this property, and the types of contracts that are involved with that and the agreements that are involved. If they're not experienced, if it's not their core business, then and they're just a general solicitor, you've really got to ask yourself whether they're going to work in your best interests? And certainly, I know, in our business, we certainly recommend the solicitor to use, but we have some clients who go out and use their own solicitor and that's fine. But if they do, they have to manage the process. They're held to account for the timelines. They're responsible for the updates and all these sorts of things.
So it does add an extra level of things you have to do. Now look, a lot of times, those solicitors won't talk to us. So we need to update developers, we need to make sure things are progressing, so that responsibility falls on you. So the answer is sort of...and this is what it comes down to. It depends.
So for me, do you use the solicitor that's recommended or do you choose your own?
If your solicitor is an expert in that field and in that particular thing, then great. Then, by all means, use them, because you trust them. And more importantly, they're competent. If they're not competent, if they're a general solicitor and you just trust them, then I would suggest you find another person. Or use the recommended solicitor. Now, there's always things that go wrong. Not always, I shouldn't say that. There's not always things that go wrong. Rarely things go wrong. But when they do, the solicitors do have the professional indemnity insurance. And that will generally cover you for certain things. But I can tell you, the worst thing you can possibly rely on is going legal. The only people that win in a legal situation is the lawyers that are representing both parties. The reality is with can you solicit your solicitor? Yes, you can. But is it in your best interests to, if the person you're choosing is not experienced? Perhaps not. I know certainly with my development company, I use a solicitor I trust. I don't use a solicitor that's recommended to me.
But if I'm buying one property or if I'm investing in a specific investment such as a hotel room, then actually I'm pretty all right with going with who's recommended as long as they're part of the Regulatory Authority, as long as they have PI insurance, and as long as they're experienced in what they're being recommended to do.
And also, I always read through the contracts, and anything I don't understand I ask questions. And that's what I say to you guys, whether you trust them or not, whether they're competent or not, ask questions.
So, three things come out of this. Number one, make sure they're a part of the Regulatory Authority, they have PI insurance. And secondly, get in and read the contract yourself. I know you don't have to, and I know they should be doing it for you and raising the points, but I would still do it because I certainly when I'm starting off, I want to understand what's going on. Especially if I'm looking to do this over and over and over again such as building a portfolio.
Okay, guys. Have a great day. Live with passion.