Risk and Practice Management
Undertakings
Providing and accepting undertakings is a necessary part of a real estate practice that has inherent risks. In order to minimize this inherent risk, the practitioner should consider the following:
- Don’t accept an undertaking that can’t be fulfilled
- Honour your undertakings scrupulously
- Follow-up on undertakings given and accepted
- Confirm an undertaking in clear and unambiguous terms
- If you don’t intend to accept personal responsibility, make that clear
- If you are unable or unwilling to honour a trust condition imposed by someone else immediately return the subject of the trust condition
- Seek and provide documentation that your undertaking has been fulfilled
- Don’t accept an undertaking from staff or a corporation that is not a law corporation under the Legal Profession Act.
Minimize your risk when giving or accepting undertakings, consider the following tips:
- Seek and provide verification that an undertaking has been fulfilled
- Obtain client’s written authorization to release information relating to mortgage - i.e. mortgage numbers, mortgage name and address
- Don’t accept an undertaking from anyone other than a lawyer
- Don’t accept an undertaking that can’t be fulfilled
- Honour your undertakings scrupulously
- Follow-up on undertakings given and accepted
- Post LRA - make sure mortgage release covers parent parcel as well as other parcels if applicable
- Confirm particulars of parties names and recording references on releases before recording
- Establish what happens if undertakings are unfulfilled within a specified time period
- Diarize and time manage undertakings given and received
- Don’t close a file unless all undertakings have been fulfilled
Resources
The Legal Ethics and Professional Conduct Handbook – chapter 13
Practice Standards for Real Property Transactions in Nova Scotia