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2004 Formal Ethics Opinion 10

July 14, 2005

Preparation of Deed When Representing Buyer in Closing

 

Opinion rules that the lawyer for the buyer of residential real estate may prepare the deed without creating a client-lawyer relationship with the seller provided the lawyer makes specific disclosures to the seller and clarifies her role for the seller.

 

Inquiry #1:

 

Attorney A represents Buyer for the purpose of closing on the purchase of residential real property. Seller is not represented by a lawyer. The purchase contract states that the property is to be conveyed by Seller to Buyer by a deed but the form of the deed may or may not be specified in the contract. If Attorney A prepares the deed as a part of her representation of Buyer, is it assumed that she also represents Seller?

 

Opinion #1:

 

No. Attorney A may prepare the deed as an accommodation to the needs of her client, the buyer, without becoming the lawyer for Seller. Prior to the execution of the deed by Seller, Attorney A must explain to Seller that her client is Buyer, that she does not represent Seller, and that she cannot give legal advice to Seller other than the advice to secure legal counsel. Rule 4.3(a). Furthermore, Attorney A must inform Seller that she will prepare the deed consistent with the specifications in the purchase agreement, if any, but, in the absence of such specifications, she will prepare a deed that will protect the interests of her client and, therefore, Seller may desire to seek legal advice. These disclosures avoid the risk of overreaching or misleading Seller. See Rule 8.4(c). To the extent that this opinion is contrary to CPR 100 or RPC 210 (Opinion #3), this opinion controls.

 

This situation is distinguishable from the situation addressed in 2002 FEO 8 which holds that a lawyer for a plaintiff may not prepare the answer to a complaint for an unrepresented adverse party to file pro se because the lawyer may not give legal advice to an unrepresented adverse party. An answer to a complaint, unlike a deed, is an adversarial document that sets forth the defendant's legal position without regard to the interests of the plaintiff. A deed, on the other hand, does not represent the unilateral interests of the seller because the buyer is the specific and intended beneficiary of the deed even though the buyer is not a signatory on the deed. Therefore, as long as the lawyer clarifies her role, makes the disclosures specified above, and does not give the seller legal advice, the lawyer may prepare the deed to further the interests of her client, the buyer. See, e.g., 2003 FEO 7 ("[T]he purpose and goals of the engagement determine the identity of the client, not the signatory on the document prepared by the lawyer.) Note, however, that preparing documents for the seller other than a deed may mislead the seller as to the lawyer's role and raise a presumption that the lawyer has duties to the seller. See, e.g., Cornelius v. Helms, 120 N.C. App. 172, 461 S. E. 2d 338 (1995), disc. rev. denied, 342 N.C. 653, 467 S. E. 2d 709 (1996).

 

Although the disclosures required by this opinion do not have to be in writing and the written consent of the seller is not required, it is the better practice for the closing lawyer to include the disclosures in a written statement that is provided to the seller prior to the seller's execution of the deed.

 

Inquiry #2:

 

If the legal fee for preparing the deed is allocated to Seller do the responses to the prior inquiries change?

 

Opinion #2:

 

No, provided Attorney A makes the disclosures required in Opinion #1 above and follows the requirements of Rule 1.8(f). Rule 1.8(f) permits a lawyer to accept compensation for a representation from someone other than the client provided the client gives informed consent, there is not interference with the lawyer's professional judgment or the client-lawyer relationship, and the confidentiality of client information is protected.

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