04-03 An attorney may not simultaneously represent a client who is selling a parcel of real property and provide limited representation to the buyer of the same real estate by providing a title insurance policy to such buyer. The scope of the obligations inherent in issuing the title insurance policy creates a contemporaneous conflict of interest that is of such a serious character that the conflict cannot be properly waived under Rule 1.7. An attorney representing a seller may properly prepare and issue a title insurance policy naming the buyer when the Seller is under a contractual obligation to provide the buyer with title insurance.
SYNOPSIS ONE: The Committee revises its prior position on the propriety of an attorney representing a lender and a borrower in the same transaction. An attorney may represent a lender and a borrower in a real estate transaction if the attorney satisfies the requirements of Rule 1.7 of the Rules of Professional Conduct (the “Rules”) by concluding that: (a) the representation of the lender and borrower in the same transaction will not adversely affect the relationship with either client; (b) that the attorney’s judgment will not be materially limited by responsibilities to either client or to a third party; and, (c) that each client agrees to the dual representation after consultation. The consultation must occur sufficiently before the closing to allow either client to obtain separate representation if desired. The consultation must also include a discussion of the implications of the common representation and the risks and benefits of the common representation. The Committee continues to believe that it is not appropriate to represent a seller and buyer in a real estate transaction.
SYNOPSIS TWO: An attorney or law firm may form a title and escrow company to provide title and escrow services, but such services constitute law related services and the Rules apply to each attorney involved in providing these related services.
See also Advisory Ethics Opinions 90-8, 94-8, 95-03 and 95-09
90-08 An attorney may not provide simultaneous representation to a borrower and a lender. An attorney may furnish the lender with title insurance and a proposed mortgage deed or comply with other similar loan requirements on the buyer’s behalf so long as the attorney does not enter into an attorney-client relationship with the lender
87-03 Because the attorney “represents” both the title insurance company and the prospective purchaser of insurance, the rules relating to representation of multiple clients determine when and if such representation is permissible.
80-03 Attorney who has certified marketability of title to client later representing that client in an action arising from boundary dispute
79-16 Attorney representing seller or real estate and as agent for sale of title insurance