Legal Ethics Opnion No. 1398

  Real Estate Transactions/Practice--Personal Interest affecting
Representation: Settlement Attorney Spouse of Real Estate Agent
for Seller and/or Purchaser

You have requested that the committee opine as to the propriety
of an attorney's conduct in several situations relevant to real
estate closings where the real estate agent is related to the
attorney conducting the settlement  represents either or both the
seller and purchaser.  

The appropriate and controlling rule relevant to the questions
you raise is DR 5-l0l(A) which precludes a lawyer from accepting
employment if the exercise of his professional judgment on behalf
of his client may be affected by his own financial, business,
property, or personal interests, except with the consent of his
client after full and adequate disclosure under the
circumstances.  Further guidance is available through Ethical
Consideration 5-l which suggests that neither the personal
interests, the interests of other clients, nor the desires of
third persons should be permitted to dilute the lawyer's loyalty
to his client.

The committee has earlier opined that it is not improper for an
attorney to engage his spouse's court reporting firm to provide
services for the attorney's clients provided that the appropriate
full disclosure, including information regarding commission fees
received by the spouse, is made to the client who then gave
consent.  LEO #l345; see also LEO #ll98.

Similarly, it was also found proper for an attorney to refer her
legal clients to her husband who was a financial planner,
provided there was full and adequate disclosure of the personal
interest, relationship and office-sharing arrangement.  LEO #834. 
The committee has also opined that it is not improper for a law
firm to invest in the stock of a realty corporation and then
conduct closings of conveyances originated by the realty
corporation as long as the law firm's personal, financial,
business or property interests will not disadvantage the clients. 
LEO #ll3l.  Finally, it was not found improper for an attorney
who was also a partner in a real estate firm to represent the
seller and/or purchaser in a legal capacity, where the property
had been sold by either the attorney or his real estate firm, so
long as full disclosure and consent occurred.  LEO #302.

In the first scenario you describe, a real estate closing where
the real estate professional involved is the spouse of the
attorney who is acting as settlement attorney for both buyer and
seller, and the real estate professional who has written the
contract is acting as legal agent for the seller, the committee
is of the view that consent must be obtained from both the buyer
and seller after full disclosure is made to them of the
attorney's personal interest.  In the second situation, where the
relationship of the attorney and real estate professional is the
same and the attorney represents the buyer and seller, but the
real estate agent is acting only as a broker for the buyer, the
committee believes similarly that consent must be obtained from
both the buyer and seller after full disclosure.  Thirdly, where
the agent has written the contract but the attorney/spouse is
acting as attorney only for the buyer while the seller is
independently represented, the committee believes that the
attorney must obtain consent from the buyer after full
disclosure.  Finally, where the attorney conducts the settlement
on his own behalf as either purchaser or seller, the committee
opines that the attorney must make full and adequate disclosure
to the opposite party in the transaction.  Obviously, full
disclosure must consist of all relevant factors, including the
relationship between the attorney and the real estate
professional, the personal and financial interest shared by them,
and disclosure as to any commissions received.  In addition,
other disclosures related to the roles of the attorney and spouse
may be necessary as part of the transaction.  The committee is
not opining as to those issues which have not been raised in your

The committee also wishes to bring to your attention that,
contrary to the statement contained in your response to item six
(6) on the Request for Legal Ethics Opinion, not all real estate
closing services may be "accomplished by non attorneys in
accordance with what has been agreed upon."  See Part Six:
Section I: Rules of the Supreme Court of Virginia: Unauthorized
Practice Rules 6-l0l through 6-l06 and Unauthorized Practice
Considerations 6-l through 6-9.

Committee Opinion
February 15, 1991

May 13, 1991