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.