Ezel / Ethics Opinions / NYSBA
NYSBA 2018-04-30

Can a real estate lawyer and a spouse who is a real estate broker send each other client referrals?

Short answer: Yes, with limits. The lawyer may take referrals from the broker spouse only if the spouse is uninvolved in the transaction and follows the lawyer-solicitation rules, and may refer clients to the spouse only when not representing them in that deal, sometimes needing the client's written informed consent.
Currency note: this opinion is from 2018
Subsequent statutory amendments, court decisions, or later opinions or rule amendments may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Disclaimer: Advisory only. Not binding precedent.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked at the bottom of this page) is the authoritative source for any reliance.

NY State Bar Ethics Opinion 1150: Referrals between a lawyer and a broker spouse

Short answer: A real estate lawyer may receive referrals from a real estate broker spouse only if the spouse is not involved in the transaction and complies with the lawyer-solicitation rules, and may refer a client to the broker spouse only when the lawyer does not represent that client in the deal, obtaining the client's written informed consent where a conflict appears.

Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the New York Rules of Professional Conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.

About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. We do not reproduce the opinion text on this page; follow the linked source for the official text, which controls.

View original opinion

Plain-English summary

The inquirer is a transactional real estate lawyer whose spouse is a real estate broker; they want to refer matters to each other, and they understand they cannot act in their respective roles in the same transaction. The committee answers three questions about referrals running each way.

The committee's core premise, drawn from N.Y. State 855 (2011), is that for conflict purposes a spouse's financial, business, and personal interests are treated as the lawyer's own under Rule 1.7(a)(2): because a lawyer could not directly do what Rules 1.8(e) and 1.8(i) forbid, the lawyer cannot do it indirectly through a spouse-owned entity. It pairs this with Rule 8.4(a), which bars a lawyer from violating a Rule "through the acts of another." On the broker spouse's referral of clients to the lawyer, the committee concludes the broker spouse "stands in the shoes" of the lawyer: any outreach initiated by or on behalf of the lawyer is governed by Rule 7.3 as if the lawyer made it. So the Rule 7.3(a)(1) exceptions for in-person or real-time contact (close friends, relatives, former or existing clients) are measured against the lawyer's clients, not the broker's, and the lawyer must ensure the spouse meets Rule 7.3's recordkeeping and filing requirements. Whether a given communication is a regulated "solicitation" turns on whether it was initiated by the lawyer rather than by a potential client (N.Y. State 1049; N.Y. State 1014), a fact-specific spectrum.

On referrals running the other way (lawyer to broker spouse), the committee finds no categorical ban, but the lawyer owes existing clients duties of care and loyalty, including independent professional judgment. Whether a referral implicates those duties depends on the relationship between the subject of the representation and the referral the client seeks; where there is a meaningful connection, the client may reasonably expect the lawyer to exercise independent judgment in referring. Here, the committee concludes a reasonable lawyer could find a significant Rule 1.7(a)(2) risk that the lawyer's personal interest would affect the referral, but the conflict is consentable under Rule 1.7(b). The required consent is not onerous: the lawyer must disclose at least the marital relationship and that any commission the broker spouse earns could benefit the lawyer; the disclosure may be oral, and the confirmation in writing (by either party, including email) need only record the client's agreement to waive the conflict.

In practice

Under this opinion, the two referral directions are governed differently. When the broker spouse refers clients to the lawyer, the spouse's outreach is treated as the lawyer's own, so it must satisfy Rule 7.3, including the limits on in-person and real-time solicitation (measured against the lawyer's own clients) and the recordkeeping and filing rules, and neither spouse may act in a transaction where the other is involved. When the lawyer refers a client to the broker spouse, the committee holds the lawyer may do so only if not representing that client in the deal, and where the circumstances suggest a conflict the lawyer must obtain the referred client's informed consent confirmed in writing, after disclosing the marriage and that the spouse's commission could benefit the lawyer.

Common questions

Q: Can a real estate lawyer take client referrals from a spouse who is a broker?

A: Yes, if the broker spouse is not involved in the transaction and the lawyer ensures the spouse's referral outreach complies with the lawyer-solicitation rules, because the spouse's outreach is judged as the lawyer's under Rules 1.7(a)(2) and 8.4(a) (Opinion 1150 ¶¶ 5-7, 10).

Q: Can the lawyer refer a client to the broker spouse?

A: Yes, if the lawyer does not represent that client in the real estate transaction. Where a conflict appears, the lawyer must obtain the referred client's informed consent, confirmed in writing (¶¶ 8-10).

Q: How much disclosure does the consent require?

A: At minimum, the marital relationship and that any commission the broker spouse earns could benefit the lawyer. The disclosure may be oral, and the written confirmation need only record the client's agreement to waive the conflict (¶ 9).

Background and rules framework

The opinion applies Rule 1.7(a)(2) (Model Rule 1.7) on personal-interest conflicts, treating a spouse's interests as the lawyer's own, and the Rule 1.7(b) consent mechanism. It relies on Rule 8.4(a) (Model Rule 8.4), barring a violation through the acts of another, and on Rules 1.8(e) and 1.8(i) (Model Rule 1.8) on litigation funding and proprietary interests as the basis for the spouse-equivalence rule. Rule 7.3 (Model Rule 7.3) governs whether the broker spouse's outreach is a regulated solicitation.

Citations and references

Rules of Professional Conduct:

  • New York Rule 1.7(a)(2), (b) (Model Rule 1.7): personal-interest conflicts and consent
  • New York Rule 8.4(a) (Model Rule 8.4): violating a Rule through the acts of another
  • New York Rule 7.3 (Model Rule 7.3): solicitation; in-person and real-time contact
  • New York Rule 1.8(e), (i) (Model Rule 1.8): litigation funding and proprietary interests

Other opinions cited:

  • N.Y. State 855 (2011): a lawyer may not refer clients to a litigation-financing company a spouse controls
  • N.Y. State 1145 (2018): no referral to a litigation funder in which the lawyer is a substantial investor
  • N.Y. State 1049 (2015): when a communication is a solicitation initiated by or on behalf of a lawyer
  • N.Y. State 1014 (2014): a client's unprompted recommendation is not a lawyer-initiated solicitation

See also

Source