Can one lawyer act for the buyer and seller of real property?

According to the Rules of Professional Conduct, one lawyer cannot act on behalf of both the buyer of real property (otherwise known as the transferee) and the seller of real property (also known as the transferor) except under limited circumstances.

In the following series of circumstances, and so long as there is no violation of rule 2.04 of the Rules of Professional Conduct, a lawyer may act for the transferor and the transferee when transferring title with respect to real property:

(a) The Land Registration Reform Act allows the lawyer to sign the transfer on behalf of both parties.

(b) The parties are "related persons," which according to section 251 of the Income Tax Act (Canada) include but are not limited to the following:

• People connected by blood relationship, connected by marriage, common-law partnership, or adoption. 
• A corporation and a person who controls the corporation (assuming that the corporation is controlled by one person).
• A corporation and a person who is a member of a related group who controls the corporation.

(c) The lawyer's practice is in a remote location where there are no other lawyers that either the transferor or the transferee could retain for the transfer, without causing them undue inconvenience.

In any of the above-noted exceptional circumstances, the lawyer must advise the clients that:

(a) The lawyer has been asked to act for both parties;

(b) None of the information that is received relating to the matter from one may be treated as confidential so for as the other is concerned; and,

(c) If a conflict ensues that cannot be resolved, the lawyer will not be able to continue to act for both parties. In such a situation, the lawyer may have to withdraw completely from the matter.

Should you wish to learn more about transfers of title to real property, contact Marilyn Krol, partner at Krol & Krol, at 905.707.3370 ext. 22.