When a North Carolina lawyer represents the buyer in a residential closing, can the lawyer prepare the deed for an unrepresented seller without becoming the seller's lawyer?

Plain-English summary

A lawyer represents the buyer in a residential closing; the seller is unrepresented. The purchase contract calls for conveyance by deed but may not specify the deed's form. The question is whether preparing that deed makes the lawyer also the seller's lawyer.

On the representation question, the opinion concludes no. The buyer's lawyer may prepare the deed as an accommodation to her client without representing the seller, but before the seller signs she must explain (under Rule 4.3(a)) that her client is the buyer, that she does not represent the seller, and that she cannot give the seller legal advice other than to secure counsel. She must also tell the seller that she will prepare the deed consistent with any specifications in the purchase agreement, and absent specifications will draft a deed that protects the buyer's interests, so the seller may wish to seek advice. These disclosures avoid overreaching or misleading the seller (Rule 8.4(c)). The opinion states it controls to the extent it conflicts with CPR 100 or RPC 210.

The opinion distinguishes 2002 FEO 6 (a plaintiff's lawyer may not prepare an answer for an unrepresented adverse party), because an answer is an adversarial document stating the defendant's position, while a deed does not reflect only the seller's interests; the buyer is the intended beneficiary of the deed even though not a signatory. So long as the lawyer clarifies her role, makes the disclosures, and gives the seller no legal advice, she may prepare the deed to further the buyer's interests (citing 2003 FEO 7, that the purpose of the engagement, not the signatory, determines the client). The opinion cautions that preparing documents other than a deed for the seller may mislead the seller and raise a presumption of duties to the seller (citing Cornelius v. Helms). The disclosures need not be in writing and the seller's written consent is not required, but a written statement to the seller before execution is the better practice.

On the fee, the opinion concludes that allocating the deed-preparation fee to the seller does not change the analysis, provided the lawyer makes the Opinion #1 disclosures and follows Rule 1.8(f), which permits a third party to pay for the representation if the client gives informed consent, there is no interference with the lawyer's judgment or the client-lawyer relationship, and confidentiality is protected.

In practice

Under the North Carolina rules as they stood at the time of the opinion, the analysis turns on the lawyer clarifying her role to the unrepresented seller. The opinion holds that a buyer's lawyer may prepare the deed without representing the seller as long as she makes the Rule 4.3(a) disclosures and drafts the deed to protect the buyer.

Per the opinion, allocating the deed fee to the seller is permissible only with those disclosures plus compliance with Rule 1.8(f); preparing other documents for the seller risks creating the appearance of representing the seller.

Common questions

Q: Does preparing the deed for the seller make the buyer's lawyer the seller's lawyer too?

A: No. The opinion concludes the buyer's lawyer may prepare the deed as an accommodation without representing the seller, if she makes the required Rule 4.3(a) disclosures.

Q: What must the lawyer tell the unrepresented seller?

A: That the lawyer represents the buyer, not the seller, that she can only advise the seller to obtain counsel, and that she will draft the deed to protect the buyer's interests so the seller may wish to seek advice.

Q: Can the lawyer prepare other documents for the seller?

A: The opinion cautions against it, because preparing documents other than the deed may mislead the seller about the lawyer's role and raise a presumption that the lawyer owes the seller duties.

Q: Can the deed-preparation fee be charged to the seller?

A: Yes. The opinion concludes that is permissible if the lawyer makes the required disclosures and complies with Rule 1.8(f) on third-party payment.

Background and rules framework

The opinion interprets Rule 4.3(a) (dealing with an unrepresented person, corresponding to Model Rule 4.3) together with Rule 8.4(c) (dishonesty or misrepresentation, corresponding to Model Rule 8.4) and Rule 1.8(f) (third-party payment of fees, corresponding to Model Rule 1.8). It distinguishes 2002 FEO 6, relies on 2003 FEO 7, and cites Cornelius v. Helms on the risk of assuming duties to a non-client.

Citations and references

Rules of Professional Conduct:

• MR 4.3 / NC Rule 4.3(a) (dealing with an unrepresented person)
• MR 8.4 / NC Rule 8.4(c) (dishonesty, misrepresentation)
• MR 1.8 / NC Rule 1.8(f) (third-party payment of fees)

Cases:

• 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), risk of duties to a non-client

Other opinions cited:

• 2002 Formal Ethics Opinion 6 (lawyer may not prepare an answer for an unrepresented adverse party)
• 2003 Formal Ethics Opinion 7 (engagement purpose, not the signatory, identifies the client)
• CPR 100; RPC 210 (superseded to the extent inconsistent)

See also

• NC State Bar 2006 FEO 5: County Tax Attorney and Unrepresented Taxpayer
• NC State Bar 2009 FEO 7: Interviewing an Unrepresented Child Witness

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/2004-formal-ethics-opinion-10/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

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 6 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.