Can a New York lawyer represent both the seller and the mortgage lender in the same real estate transaction with the consent of both?
NY State Bar Ethics Opinion 611: Representing both the seller and the lender
Short answer: The opinion concluded that a lawyer may represent both the seller and the mortgage lender in a real estate transaction only after weighing the specific facts and being satisfied that the parties' interests are not likely to differ, and only with full disclosure and the consent of both.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the New York State Bar Association's 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.
Plain-English summary
The committee was asked whether, with full disclosure and consent from both, a lawyer may represent both the seller and the mortgage lender in a real estate transaction. It restated the Code's framework for serving multiple clients with potentially differing interests in non-litigation matters: under DR 5-105(C), the representation is permissible only if it is obvious the lawyer can adequately represent each, and EC 5-15 through EC 5-17 explain that a lawyer may proceed where interests differ only slightly, the lawyer can maintain independent judgment for each, and a later withdrawal would not be unduly disruptive. The committee drew on its real estate precedents (N.Y. State 38, 162, and 438, and N.Y. County 615) permitting dual representation of buyer and seller, or lender and borrower, only in unusual and limited circumstances and after full disclosure and consent.
The committee observed that, because seller and lender frequently do not negotiate directly, their dual representation seems an easier case, but it cautioned the lawyer not to assume it is permissible in every transaction. The lawyer must weigh the potential for differing interests on the specific facts and resolve all doubts against the representation. It gave concrete examples of how interests can diverge: if a question arises about the acceptability of title, an environmental condition, or another closing condition, the seller may want to close while the lender concludes it has no obligation to lend, and the lawyer might then have to withdraw from representing either party, with delay and disruption. The committee concluded that where it is not unlikely such differing interests will arise, the multiple representation should be declined; only where the lawyer is satisfied that differing interests are not likely, and both clients consent after full disclosure, may it be undertaken.
Currency note
This opinion was issued in 1990, under New York's former Code of Professional Responsibility, which New York replaced with the Rules of Professional Conduct in 2009. 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 New York lawyer represent both the seller and the lender in a real estate deal?
A: Sometimes. The committee held it is permissible only after the lawyer weighs the specific facts, concludes the parties' interests are not likely to differ, and obtains full disclosure and consent from both; otherwise it must be declined.
Q: When must the lawyer decline?
A: Where it is not unlikely that differing interests will arise, the committee said the representation should be declined, and all doubts should be resolved against undertaking it (EC 5-15).
Q: How can a seller's and a lender's interests differ?
A: The committee gave the example of a dispute over the acceptability of title, an environmental condition, or another closing condition, where the seller may want to close but the lender may decide it has no obligation to make the loan, potentially forcing the lawyer to withdraw from both.
Background and rules framework
The opinion interpreted DR 5-105 and its subsection (C) (a lawyer may represent multiple clients with differing interests only if it is obvious the lawyer can adequately represent each and each consents after full disclosure), as elaborated by EC 5-15, EC 5-16, and EC 5-17 on declining or accepting multiple employment. The closest Model Rule analogue is Rule 1.7 (concurrent conflicts of interest and informed consent).
Citations and references
Rules of Professional Conduct:
- MR 1.7 (concurrent conflicts of interest)
- NY DR 5-105; DR 5-105(C); EC 5-15; EC 5-16; EC 5-17
Other opinions cited:
- N.Y. State 38 (1966): dual representation of buyer and seller only in unusual and limited circumstances
- N.Y. State 162 (1970): dual representation where business terms are fully settled and a title policy is obtained
- N.Y. State 438 (1976): representing lender and borrower with consent if DR 5-105(C) is met
- N.Y. County 615 (1973): dual representation in a simple real estate transaction
- N.Y. State 258 (1972): a lawyer should not represent both spouses in a matrimonial matter even with consent
See also
- NY State Bar Op. 626: Real estate multiple representation and the fee
- NY State Bar Op. 621: Referring real estate clients to an attorney-owned abstract company
- NY State Bar Op. 1015: Lawyer-broker representing a seller with a flat fee
Source
- Landing page: https://nysba.org/opinion-611/