LEO 1000

LEO: Real Estate - Representation of Buyer and LE Op. 1000

Real Estate - Representation of Buyer and Seller.

November 12, 1987

You advise that a lawyer represented both the buyer and seller in a real

estate transaction. Prior to settlement, the buyer and seller entered into

an agreement whereby the seller would complete a list of repairs by a

certain date. The seller failed to complete, or even start, the repairs by

this date. The buyer then approached the lawyer and requested that the

lawyer represent buyer against seller in order to get the work completed.

The lawyer advised the buyer that he could not represent the buyer and

seller. The lawyer also advised the buyer that he could not represent the

seller either.

You wish to know whether or not the lawyer had a duty at the outset of

his representation of the buyer and seller to advise both clients that if

a dispute arose he could not represent either party against the other.

LE Op. 414 is dispositive of your inquiry. In that opinion the

Committee stated that from the beginning of the representation of both the

buyer and seller in a real estate transaction, a conflict of interest is

created. The Committee advised that this conflict may be avoided by full

disclosure and consent of the parties under DR:5-105. DR:5-105(C)

provides that a lawyer may represent multiple clients, if it is obvious

that he can adequately represent the interest of each, and if each

consents to the representation after full disclosure of the possible

effect of such representation on the exercise of his independent

professional judgment on behalf of each.

The Committee reiterates LE Op. 414 and advises that when a lawyer

represents both the buyer and seller in a real estate transaction, the

lawyer has a duty to inform his clients, at the outset of the transaction,

that he will not be able to represent either party against the other if a

dispute should arise.

Committee Opinion November 12, 1987

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