A solicitor has been fined for failing to provide adequate advice to clients on the high risks associated with purchasing and subletting rooms in care homes.
The Solicitors Regulation Authority (SRA) has sanctioned Jonathan Sara, an experienced conveyancer, for failing to inform clients sufficiently about the significant risks involved in buying rooms or suites in care home developments. Between February 2017 and March 2019, Mr. Sara advised over 100 clients while serving as a director at Private Office Legal Services in Hertfordshire. According to a recently published notice, Mr. Sara “knew, or should have known,” the inherent risks in these transactions.
The SRA had issued warning notices as early as September 2016 and June 2017, emphasising the need for practitioners to deliver comprehensive advice to clients persuaded to invest in fractional developments, such as single hotel rooms or care home rooms. These investments have been problematic, with many failing and leaving investors at a loss. However, Mr. Sara continued to treat the transactions as standard conveyances, neglecting to inform his clients of the potential dangers.
The regulator highlighted that Mr. Sara’s conduct was not intentional, nor did it persist once identified as incorrect. His repeated errors across various files were deemed a consistent oversight rather than a deliberate breach. Consequently, the potential for harm to Mr. Sara’s clients was moderate, impacting proposed investors in these schemes.
Mr. Sara resigned from his directorial position at Private Office Legal Services in September 2019, and the firm subsequently went into liquidation in December 2020. Currently, he is employed at Nexa Law, a fee-share consultancy firm. The SRA recognised that his regulatory failings were not intentional, nor was there evidence of dishonesty or a lack of integrity. Mr. Sara’s clientele were not considered vulnerable individuals. Following the SRA’s fining guidance, a financial penalty of £5,165, representing 8% of his annual gross income, was imposed, in addition to costs of £1,350.
Anca-Florina Mitrana, a newly qualified solicitor working under Mr. Sara at the time, was also rebuked for similar infractions occurring between September 2017 and November 2018. While her actions were more than a singular negligent error, the SRA deemed a severe sanction unnecessary, considering her lack of experience and the senior legal oversight she was under. Furthermore, no allegations of dishonesty or a breach of integrity were raised against her, nor did she intentionally contravene her regulatory duties. Today, Ms. Mitrana is employed by the national firm Taylor Rose.
This case highlights the importance of solicitors understanding the unique risks associated with fractional property investments and providing comprehensive advice to clients.
