The collaboration between conveyancers and estate agents is essential for facilitating property transactions in South Africa. Recently numerous complaints to the Legal Practice Council (“LPC”), governing legal practitioners (“conveyancers”), & the Property Practitioners Regulatory Authority (“PPRA”), governing property practitioners (“estate agents”), alleging unethical conduct between estate agents and conveyancers, have raised serious concerns about the integrity of real estate transactions. Circular_on_unethical_conveyancing_practices2025.pdf

It is common practice for estate agents to recommend conveyancers to clients, being both sellers and buyers alike, during property transactions. However, when referrals to conveyancers are not based on merit or quality of service but rather on the expectation of financial rewards or reciprocal favours, the effects of the collusion have far-reaching consequences, namely:

• Conflict of interest – as the conveyancer’s loyalty lies with the estate agent rather than the best interests of the client.
• Consumer detriment – poor service quality as the referral was made for profit rather than professionalism.
• Undermining trust – collusion erodes public confidence in both the legal and property sectors especially when buyers and sellers feel manipulated.

Communication was sent out by the LPC to legal practitioners in March 2025 drawing attention to the provisions of the LPC Code of Conduct regarding the unethical practices of touting for business and accepting bribes.

The LPC’s notice provided examples of unethical conduct that conveyancers should avoid as it is in violation of the LPC’s Code of Conduct, like:

• Touting for Business – Offering or accepting commissions to and from non-attorneys for client referrals.
• Pre-printed Names in Deeds – Including a conveyancer’s name in a deed of sale without prior written instruction from the client.
• Premature commission payments – Paying an agent’s commission before it is due, using funds not provided by the person liable for payment.

On 2 June 2025, the LPC and PPRA jointly released a further communique highlighting the prevalence of kickbacks and monetary rewards exchanged for business referrals.  Joint_communique_released_by_the_lpc_the_ppra_02_june_2025_.pdf

Key Highlights of the Joint Communication included:

• Prohibition of Kickbacks and Monetary Rewards – Both the LPC and PPRA condemned the practice of offering or accepting any form of financial inducement in exchange for professional work referrals as it undermined the integrity of the respective professions and violated established codes of conduct.
• Legal Consequences if found guilty –
  • Conveyancers – can be suspended from practice or struck off the roll and/or face possible criminal charges.
  • Estate agents – a fine of up to R200 000 and/or withdrawal of their Fidelity Fund Certificates.
• Encouragement to report – Conveyancers, estate agents and the public were urged to report any instances of unethical conduct as collaboration and transparency are essential in maintaining the credibility and trustworthiness of the professions.

OUR ADVICE TO SELLERS AND PURCHASERS:

• Sellers have the right to choose a conveyancer so assert your rights accordingly. However, both Seller and Purchaser in a transaction, may also agree to choose a specific conveyancer together.
• Choose a conveyancing firm based on experience, cost, reputation and service.
• Demand transparency by asking estate agents to disclose referral arrangements or incentives.
• If you suspect collusion or unethical conduct, report it to the LPC & PPRA as they are committed to upholding the highest ethical standards and ensuring that all practitioners operate with integrity and professionalism.

CONCLUSION:

The unethical conduct and collusion between estate agents and conveyancers not only breaches ethical and legal standards but also compromises consumer interests. So, while collaboration between estate agents and conveyancers can add value it must be entrenched in transparency, professionalism and respect for consumer choice. Sellers and Purchasers deserve a system built on trust and not on secret deals behind closed doors.

By Patricia Morgan (Director) | Conveyancing Department