LEO: Fees - Real Estate Transactions: Seller's  LE Op. 1204

 

Fees - Real Estate Transactions: Seller's Attorney Charging Fee to

Purchaser Absent Prior Consent When Purchaser is Represented

by Separate Counsel.

 

March 11, 1989

 

You advise that you were retained by the purchasers to represent their

interest in the purchase of a house. Prior to settlement, you informed

seller and seller's attorney, whom the seller designated as settlement

attorney, of your representation of purchasers. On the date of settlement,

you were informed by the settlement attorney that a fee in the amount of $

295.00 would be imposed on the purchasers as a settlement fee. You have

further indicated that the settlement attorney had prepared a deed, and

the deed of trust and note on behalf of his client, the seller, which

secured and designated the seller as noteholder and payee on the note.

However, there were no settlement fees imposed on the seller by the

settlement attorney.

 

You believe that LE Op. 425 and LE Op. 647 would prohibit a

settlement attorney from imposing a fee upon the purchaser, absent any

prior agreement, under the circumstances. You wish to know whether it is

proper for the settlement attorney, absent any prior agreement, to impose

a settlement fee upon the purchaser when the purchaser is represented by

separate counsel.

 

The Committee is in agreement with your conclusion and would opine that

LE Op. 425 and LE Op. 467 are dispositive of your inquiry. (See also

LE Op. 878 and LE Op. 911) Absent any notification to purchaser well in

advance of closing and the purchaser's consent for additional fees, it is

improper for the settlement attorney to charge any settlement fees to the

purchaser when he or she is represented by separate counsel. (See DR:2-

105)

 

The settlement attorney, who was designated by the seller, performed

functions on behalf of and in the best interest of his client, the seller.

Therefore, since he did not assume any responsibility to the purchaser, he

may not impose a fee on the purchaser. (See DR:2-105(D))

 

Committee Opinion March 11, 1989

 

CROSS REFERENCES

 

See also LE Op. 1346.