LEO: Preparation of Loan Documents  LE Op. 1094

 

Preparation of Loan Documents.

 

October 26, 1988

 

You wish to know whether or not it is proper for an attorney for a

borrower to sign a stipulation that loan agreements and loan documentation

prepared by a bank are legal, valid, binding and enforceable.

 

Disciplinary Rule 5-105(A) states that "A lawyer shall decline proffered

employment if the exercise of his independent, professional judgment on

behalf of a client will be, or is likely to be, adversely affected by the

acceptance of the proffered employment, except to the extent permitted

under DR:5-105(C)." Disciplinary Rule 7-101(B) states: "In his

representation of a client, a lawyer may: (1) With the express or implied

authority of his client exercise his professional judgment to limit or

vary his client's objectives and waive or fail to assert a right or

position of his client." [ DR:7-101]

 

The Committee opines that this transaction does not compel an attorney to

have undivided loyalties. This is the traditional method of representing a

client in a real estate closing and it is required that the attorney

provide his or her opinion to the client concerning the enforceability and

validity of the loan documents.

 

Committee Opinion October 26, 1988