A solicitor has been fined £17,000 by the Solicitors Regulation Authority after failing to advise multiple overseas buyers of the risks involved in the purchase of over 300 properties being constructed or refurbished by a property developer.
Ming Fai Tam, also known as Matthew Tam, acted for the buyers between 2017 and 2020 in his capacity as solicitor and partner of Batchford Solicitors, of which he subsequently became sole proprietor and renamed MFT.
The scope of Tam’s work, along with that of a barrister and part-time consultant appointed to work on the cases (person A), included acting on behalf of the overseas clients and dealing with all legal requirements, for which they paid fees of around £1,295 per property plus deposits of between 30% and 100% of the purchase price.
Ten development schemes incorporating 312 units, including flats and houses, ultimately failed – in some cases before any construction work began. A forensic investigation conducted by the SRA found Tam had failed to advise on the risks of purchasing such properties, and deposits were higher than would normally be expected with a risk of losing the entire deposit. The investigation also found the buy-back and rental assurance provisions in the agreements were not effective.
Tam accepted he had failed to give adequate advice to the clients or provide a competent service. He also agreed he had failed to maintain the relevant level of competence to carry out his role, or to train or supervise the consultant he had appointed to assist him in carrying out the work.
‘Mr Tam had a duty to advise clients of the obvious inherent risks that had come or ought to have come to his attention’, the SRA noted in its decision.
“Mr Tam, as a supervisor and as a principal of the Firms was under a duty to ensure that he provided person A with adequate training and supervision and that person A provided a competent service to clients and made them aware of all relevant issues, including the risks inherent in the investments they were making. Members of the public would not expect solicitors to engage staff with limited experience and allow them to act without adequate training and supervision.”
The SRA and Tam agreed that the nature of misconduct was high due to the pattern of failures across all the cases examined, and its impact was medium as clients had lost large amounts of money that may have been avoided if Tam had given adequate advice.
In mitigation, Tam said he was undertaking training, his files were being reviewed by partners in his current firm – Chan Neill Solicitors LLP – and he no longer takes on work involving the sale of fractional units.
Noting that Tam had not benefitted personally from the misconduct, the decision noted:
“On this basis, the SRA considers a basic penalty of £17,083 which is at the highest end of the bracket to be appropriate.”
