It is common for real estate agents to recommend lawyers to their clients, while some people find their own lawyers. What should I be aware of when I find my own lawyer? What are the risks?
There are four key points to note when seeking a lawyer when buying or selling a property.
Check if the law firm is on the list of bank-approved law firms
When choosing a lawyer on your own, verify that the lawyer you appoint is on the list of bank-approved law firms to ensure a smooth property sale process.
Check whether the solicitor has taken out insurance and coverage for the property transaction
Buyers and sellers can check with the solicitor they instruct to see if he has taken out insurance and protection money for the property, preferably at a level equivalent to the price of the property. If the lawyer makes a mistake, the bankruptcy may not be compensated if the lawyer does not have insurance.
Verify the identity of the lawyer's practice
To avoid impersonation, both parties can visit the Law Society of Hong Kong website to ensure that the person appointed is a licensed lawyer.
Identify the position of the person who will assist in the sale and purchase of the property
The buyer and seller should identify whether the person in charge of the property sale is a practicing lawyer, or an assistant or a clerk. It is important that a licensed attorney review all the deeds behind the attorney to ensure that there are no legal problems with the sale.
It is not illegal to not hire a lawyer to handle a property sale, but the risks are higher.
In general, the attorney is responsible for the formal sale and purchase agreement and the deed of assignment. If the buyer and seller want to save money on legal fees, is it possible to draft the sale and purchase documents and assignments on your own? Are these documents recognized by law? What are the risks of not going through a solicitor?
There is no law in Hong Kong that requires a lawyer to handle the sale and purchase of a property, so it is not illegal for owners to draft their own sale and purchase documents and assignments.
However, most buyers and sellers may not have the legal knowledge and may miss the key points, which may lead to a bad deal or even loss. For example, they may not be able to distinguish whether the title is complete.
The purpose of retaining a lawyer for the sale of a property is to protect both the buyer and the seller, but some people may be concerned about the high cost of the lawyer's services. In fact, before 1997, attorney fees were linked to the transaction price of the property.
However, after 1997, the market determined the price of the services and each law firm had internal guidelines on fees, but buyers could still compare the fees of two or three law firms before choosing one.
Buyers and sellers are required to sign an engagement letter when they hire a lawyer. Some retainer letters may be simpler in terms of the duties of the attorney, but when it comes to complex or additional items, the attorney's fee may be calculated on a per-hour basis.
Even if the retainer is "all inclusive," but "all inclusive" refers to a specific area, additional fees will be charged for additional matters, such as water leaks found in the unit that need to be repaired or which party is responsible for the sale or purchase. The buyer and seller need to read the terms and conditions carefully when signing the solicitor's engagement letter.
