Property purchase

Press, 13 July 1985, Page 18

Property purchase

Sir,—There is an exciting new way of making money without any effort. I purchase a property, valued at $lOO,OOO, and offer the vendor $120,000, provided he leaves $BO,OOO in second mortgage at a

good rate of interest. When the papers are signed I borrow $BO,OOO on first mortgage, pay the vendor $40,000 cash and get the title of the property as well as $40,000 pocket money, tax-free. The fact that I managed to practically wipe out the security on the second mortgage does not concern me. Houses and greedy vendors are easy to come by. What worries me is running out of willing solicitors helping me with my jugglings. It would be a great help if the Law Society would publicly assure the members of the profession that this kind of work is completely ethical, apart from being quite lucrative too. — Yours, etc., C. E. L. FIELD. July 7, 1985.

[Mr I. S. Cameron, president of the Canterbury District Law Society, comments: “I am pleased that your correspondent who, for satirical effect, represents himself as an avaricious purchaser of dubious morality, is worried about running out of willing solicitors, because I believe that the majority of solicitors and legal firms would neither condone nor actively support this kind of dealing. It would not, however, be unethical for a solicitor to accept instructions from a purchaser who has himself negotiated the contracts described in the letter. Ethical questions as to the solicitor’s conduct might arise if the solicitor (a) were himself a party to the transaction, (b) took an active part in the negotiations with the vendor, or (c) accepted instructions to act for both vendor and purchaser, in which case he would be unable independently to advise the vendor. Any property owner who might be tempted by an offer which exceeds the market value of the property, or which would require a large amount to be left owing on mortgage, or which is presented by someone other than a real estate agent engaged by the owner to sell the property, should consult his or her solicitor before signing anything.”]