Can a North Carolina lawyer certify title or give a title opinion on real property the lawyer (or the lawyer's firm) personally owns, is selling, or is buying?
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This page answers the general question as of 1980. Ezel answers yours: whether it's allowed on your facts, under the current North Carolina Rules of Professional Conduct, with citations.
Plain-English summary
The opinion drew a line between a lawyer's role on the sell side and the buy side of a real estate transaction in which the lawyer has a financial stake. When a lawyer owns the property being sold, or has a beneficial interest in a corporation, partnership, or other entity selling it, the opinion concluded that it is unethical for the lawyer or any member of his firm to certify title or issue a title opinion in connection with the sale.
When the lawyer is instead the buyer, or has a beneficial interest in an entity that is purchasing or obtaining a loan on real property, the lawyer or a firm member may certify title or issue a title opinion for the benefit of an institutional lender, a title insurance company, or the purchasing entity, but only if the lawyer fully discloses his beneficial interest to all parties to whom he is certifying. The opinion defined "member of a law firm" to include partners and associates, and defined "beneficial interest" to include individual or cotenant ownership while excluding equity ownership in a publicly held corporation, savings and loan association, or credit union. The opinion stated that it modifies CPR 236 and CPR 246.
Currency note
This opinion was issued in 1980 under North Carolina's former Code of Professional Responsibility (the DR/EC framework), before the State Bar replaced the Code with the Rules of Professional Conduct (adopted 1985) and before the 2003 revisions to those Rules. The conflict-of-interest principles it applied correspond to today's Model Rule 1.7. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.
Common questions
Q: Can a lawyer certify title on property the lawyer is selling?
A: No. The opinion concluded it is unethical for the lawyer or any member of his firm to certify title or give a title opinion when the lawyer owns, or has a beneficial interest in the entity selling, the property.
Q: What about property the lawyer is buying or financing?
A: The lawyer or a firm member may certify title for an institutional lender, a title insurer, or the purchasing entity, but only if the lawyer fully discloses his beneficial interest to all parties he is certifying to.
Q: Does owning shares in a publicly held lender count as a beneficial interest?
A: No. The opinion defined "beneficial interest" to include individual or cotenant ownership but to exclude equity ownership in a publicly held corporation, savings and loan association, or credit union.
Background and rules framework
The opinion applied the conflict-of-interest principles of the former Code of Professional Responsibility, which correspond to today's Model Rule 1.7. The analysis turned on the difference between certifying to a buyer or lender (a relationship the disclosed interest does not poison) and certifying as the seller (where the lawyer's stake is adverse to the party relying on the certification).
Citations and references
Rules of Professional Conduct:
- North Carolina Code of Professional Responsibility (conflicting interests; disclosure)
- MR 1.7 (conflicts of interest)
Other opinions cited:
- North Carolina CPR 236 and CPR 246 (modified by this opinion)
See also
- NC Ethics Op. CPR 101: certifying title to a title insurer the lawyer has an interest in
- NC Ethics Op. CPR 15: lawyer-guardian examining title for buyer of ward's land
- NC Ethics Op. CPR 100: the lawyer's role in a residential loan transaction
Source
- Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/cpr-254/
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
If a lawyer owns real property which he is selling or has a beneficial interest in a corporation, partnership or other entity which is selling real property, it is unethical for him or a member of his law firm to certify title or issue a title opinion in connection with the sales transaction.
If a lawyer is purchasing real property or has a beneficial interest in a corporation, partnership or other entity which is purchasing real property or obtaining a loan on real property, then either he or a member of his law firm may certify title or issue a title opinion in connection with the purchase or loan at the request of, or for the benefit of, an institutional lender, a title insurance company or the purchasing entity, if the attorney fully discloses his beneficial interest to all parties to whom he is certifying the title.
For purposes of this opinion, "member of a law firm" includes either a partner or associates therein. Having a 'beneficial interest" includes ownership as an individual or cotenant, but does not include equity ownership in a publicly held corporation, savings and loan association or credit union.
This opinion is a modification of CPR 236 and CPR 246.
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