Buying a flat in Israel? The Israeli Bar prohibits one solicitor from representing both buyer and seller (the builder). However, the Bar does allow the same solicitor to represent the buyer only for task of registering the flat at the Land Registrar (tabu). In other words, if you buy a brand new flat from the builder and you do not hire your own solicitor, you are, in effect, buying it without any legal representation.
When purchasing a "second handed" flat, on the other hand, it is permissible (yet strongly not recommended) for the same solicitor to represent both the seller and the buyer, given, of course, that both parties agree to it explicitly and in writing.
The Solicitor's Role – land purchase
The solicitor plays a major role in the purchase of a property. He must confirm the legal status of the property prior to the purchase. This requires numerous examinations at various municipal offices. Additionally, the solicitor must confirm that the flat has not undergone any illegal structural modifications, and that there aren't any "compulsory purchase orders" that could damage the property's value in the future. The solicitor must also conduct a verification of the authenticity of the seller's identity and ownership of the flat. These and other important verifications obtained by a close inspection of the documents at the land registry are what make hiring your own advocate a necessity.
Another issue is the risk of conflicting interests, when the same solicitor represents both buyer and seller. Often, the seller is the one to introduce the solicitor to the deal, a fact that only raises the dangers of conflicting interests, as the sellers best interest is higher on the solicitor's priority list. Trouble can occur in any of the verification processes conducted by the solicitor. If he has to choose between his loyalty to the seller, who provides him work regularly and the buyer, with whom he works on a one-time basis, who is he likely to choose?
Property transactions in Israel requires processing time. Often, even after all the documents signed and the money paid, the final registration of the property will take place on a later date. In order to prevent any payment difficulties later, a part of the payment is left in escrow with the seller's solicitor. This is to ensure that any payments owed by the seller are paid in a timely manner. When the solicitor represents both buyer and seller, there is no true escrow since the solicitor is obligated to both the seller and the buyer equally.
Lastly, in the event of dispute between the two sides, the Israeli bar association's Rules of Ethics prohibits the solicitor of the sides from representing either party. This leaves both seller and buyer at a disadvantage.
Real property transactions are complex. It's not in vain that the Israeli law requires a written document to perform real property transaction. This requirement attempts to provide the protections necessary in a deal that may be a large part of one's fortune. A shortcoming in the transaction procedures may jeopardize one's life long savings.
It is only logical and responsible, therefore, to take the necessary precautions when making a real property transaction. When comparing the size of the transaction, its potential benefits and the great risks, hiring your own solicitor is the only sensible thing to do.