Legal matters: Switching lawyers can be costly
If you start with one lawyer, you should let them know if you don’t plan on using their services for closing.
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Q: Approximately two months ago, my wife and I purchased a condo as an investment property. We had as a condition of the offer that our lawyer review the status certificate which gives us a snapshot of the condo and the building. We engaged a lawyer for this task and then moved towards closing.
We ran into an old friend a couple of weeks ago and he suggested that we use the lawyer he retained that was around the corner from our house. We did so and then two days before the closing, we heard from the original lawyer we spoke with and were informed that we did not cancel his engagement and work had been done on our file that resulted in hard costs (known as disbursements). He is now stating these need to be paid for. What do we need to do?
A: Typically, when a lawyer reviews a status certificate for the purchase of a condo, the understanding is that you will use their services for the closing of the property.
In this case, you decided to engage another lawyer but did not inform the former lawyer they were not retained. Unfortunately, he proceeded to prepare your transaction including items such as a title search, opening files and ordering tax certificates. These are hard costs that he pays on your behalf. By switching mid-stride after work had been performed on your file, you had two lawyers acting on your behalf: the hard costs for which you are responsible for.
Always remember, communication is key.