1. Each time a seller of land, other than a sale by auction or tender either:

(a) instructs you to deal with more than one prospective buyer; or (b) to your knowledge

(i) deals directly with another prospective buyer (or their conveyancer); or

(ii) instructs another conveyancer to deal with another prospective buyer; you must, with the client’s consent, immediately inform the conveyancer of each prospective buyer, or the prospective buyer if acting in person.

2. If the seller refuses to agree to such disclosure, you must immediately stop acting in the matter.

3. You must not act for both the seller and any of the prospective buyers.

4. You must not act for more than one of the prospective buyers.

Note that these provisions do not apply just to an individual solicitor but also to a firm as a whole (ie you cannot avoid them by asking someone else in your firm to deal with one of the buyers in a contract race). Para 43 of the guidance states that ‘deal’ covers ‘any communication’ with the relevant parties that is ‘intended to progress the transaction’.

For instance, being instructed to send a draft contract or a plan of the property to a buyer would be an example of dealing; but, the problem here is that a solicitor may be deemed to have dealt with another party despite not having sent out a contract. There is an exception for when the solicitor provides information to an estate agent (or an HIP provider), and that will not amount to dealing – but this cannot be used as a way of indirectly providing additional information to other buyers.

It is important to remember that contract races are not banned. It is merely that each of the parties must be properly notified that he or she is in a contract race. Note that the terms of the contract race are totally at the discretion of the parties; the terms (and contracts) do not have to be identical for each prospective buyer. Note also that a solicitor cannot act for both buyer and seller in a contract race; nor can he act for more than one of the prospective buyers. © Practical Lawyer