LEO: Real Estate - Attorney Representing LE Op. 437
Real Estate - Attorney Representing Multiple Parties.
November 17, 1981
Where Builder's attorney has been entrusted with a deed from Seller to
Builder to accomplish closing of a construction loan from which the
purchase price of the land will be paid, Builder's attorney would be able
to record the deed prior to receipt of loan proceeds only if Seller had
full knowledge that such would be done and consented to that procedure.
Moreover, it is assumed that Seller is not represented by his own counsel.
Therefore, Builder's attorney must obtain from Seller his consent to
representation of multiple parties and must undertake the obligation of
explaining to Seller the risks involved in the dry closing. Where Buyer's
attorney, closing a residential transaction, is dealing with an
unrepresented Seller and intends to close a second deed of trust loan from
which a portion of the purchase price will be paid, the same constraints
mentioned above are applicable. Buyer's attorney must explain to Seller
the risks which will follow from recordation of Seller's deed prior to
funding of the loan and must obtain Seller's consent. Disclosure should
also be made of the attorney's multiple representation and consent
obtained. [See II: DR:5-105(C), DR:7-102(A)(1) & (3), and DR:9-102(B).]
Committee Opinion November 17, 1981
See also LE Op. 1216.