Can a lawyer prepare the deed and loan documents for both the seller and the buyer in a real estate deal without ever talking to them?

Plain-English summary

A lawyer received an earnest money contract signed by a seller and a buyer that listed his firm as attorney for both parties. The contract called for a wraparound mortgage but said nothing about special clauses that might favor one side, and it was not a simple or routine purchase and sale; it required instruments that might contain elaborate clauses the parties had not addressed in striking their deal. The lawyer had no contact with either party but proceeded to prepare a warranty deed retaining vendor's lien, a deed of trust, and a note with a deed of trust securing a second lien, while disavowing any attempt to favor either side.

The Committee concluded that, under these facts, the lawyer's independent professional judgment on behalf of one party would likely be adversely affected by the representation of the other, so a violation of DR 5-105(A) and/or (B) would exist unless the requirements of DR 5-105(C) were met. That means full disclosure of the possible effect of the dual representation on the lawyer's independent professional judgment for each party, plus the consent of each party afterward, are prerequisites to representing both. The opinion cited Ethics Opinions 228 (1959) and 408 (1984), Ethical Considerations 5-14, 5-15, and 5-16, and Dillard v. Broyles, 633 S.W.2d 636 (Tex. App. 1982).

The Committee observed that the then-current Texas Code did not require the parties' consent to be in writing, but it pointed real estate practitioners to a form Dual Representation Disclosure and Consent Letter published in the March 1987 Texas Bar Journal for possible adaptation. It added that, depending on the facts, DR 6-101(A)(2) may require the lawyer to counsel with the parties.

Currency note

This opinion was issued in 1987, under the former Texas Code of Professional Responsibility, which the Texas Disciplinary Rules of Professional Conduct replaced effective January 1, 1990. The Disciplinary Rules have since been amended, and Texas never adopted the ABA's Ethics 2000 framework. The current Texas rule on conflicts in a concurrent representation is Rule 1.06, and the closest ABA analog is Model Rule 1.7. Subsequent rule changes 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 Treat this page as historical context, not current guidance.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 one lawyer draft the documents for both buyer and seller?

A: Per the opinion, only if the lawyer satisfies DR 5-105(C): full disclosure of the possible effect on his independent professional judgment for each party and the consent of each party. Without that, the dual representation violates DR 5-105(A) and/or (B) on these facts.

Q: Did it matter that the lawyer never spoke with the parties?

A: The Committee found the matter was not a simple or routine sale and that the instruments might contain clauses the parties had not addressed. On those facts the lawyer's judgment for one party would likely be adversely affected by representing the other, triggering the DR 5-105 analysis.

Q: Does the consent have to be in writing?

A: The Committee noted the then-current Code did not require written consent, but it pointed practitioners to a form Dual Representation Disclosure and Consent Letter in the March 1987 Texas Bar Journal for possible adaptation.

Background and rules framework

The opinion interprets DR 5-105 of the former Texas Code of Professional Responsibility, which addresses declining or continuing employment when a lawyer's independent professional judgment is likely to be adversely affected by representing differing interests (DR 5-105(A) and (B)), and permits the representation only with full disclosure and consent (DR 5-105(C)). It also references DR 6-101(A)(2) (adequate preparation). The closest current concepts are Texas Rule 1.06 and Model Rule 1.7 on concurrent conflicts. The analysis turns on whether the transaction's complexity makes the parties' interests differ enough to require disclosure and consent.

Citations and references

Rules of Professional Conduct:

• MR 1.7 (concurrent conflicts of interest)
• DR 5-105(A), DR 5-105(B), DR 5-105(C), DR 6-101(A)(2), Texas Code of Professional Responsibility

Cases:

• Dillard v. Broyles, 633 S.W.2d 636 (Tex. App. 1982, ref. n.r.e.), cert. denied, 463 U.S. 1208 (1983)

Other opinions cited:

• Texas Professional Ethics Committee Opinions 228 (1959) and 408 (1984)

See also

• TX Ethics Op. 525: Lender's Attorney Preparing a Deed for the Seller
• TX Ethics Op. 487: Joint Representation With an Advance Disclosure Agreement

Source

• Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-448/
• Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_448.pdf

Original opinion text

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

QUESTION PRESENTED

May a lawyer, under the facts below stated, properly represent both parties to a real estate transaction (Seller and Buyer) by preparing instruments of conveyance and instruments of indebtedness and security without having any personal contact with such parties under the facts stated below?

STATEMENT OF FACTS

Lawyer was delivered an Earnest Money Contract signed by Seller and Buyer listing his firm as attorney representing both Seller and Buyer. The Contract indicated the necessity of a "wraparound mortgage" although it was silent concerning any special clauses and which might favor or be for the interest of either party. The Contract involved did not contemplate a simple or routine purchase and sale, but rather required preparation of instruments which might or might not contain elaborate clauses not apparently addressed by the parties in the striking of their deal. Lawyer had no contact with either Seller or Buyer concerning the transaction, but proceeded to prepare a Warranty Deed retaining Vendor's Lien, a Deed of Trust, and a Note with a Deed of Trust to securing a Second Lien, disavowing any attempt to favor one party over the other.

DISCUSSION

Under these facts, a lawyer's independent professional judgment, on behalf of one party would be likely to be adversely affected by the representation of the other party and hence a violation of DR 5-105(A) and/or (B) would exist unless the requirements of DR 5-105(C) are met. Thus, full disclosure by the Lawyer of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each, as well as the consent of each party thereafter to such representation, are prerequisites to such representation of both parties. DR 5-105(C). See Ethics Opinion 228 (1959) and Ethics Opinion 408 (1984). See also EC 5-14 and EC 5-15 and EC 5-16. See also Dillard v. Broyles, 633 S.W.2d 636 (Tex.App.--Ft. Worth 1982, ref. n.r.e.), certiorari denied, 103 S.Ct. 3539, 463 U.S. 1208. While the PEC observes that the present Texas Code of Professional Responsibility does not require that the consent of the parties be in writing, the committee cites for appropriate consideration of real estate practitioners a form of Dual Representation Disclosure and Consent Letter which appears in the March, 1987 Texas Bar Journal at pages 290 and 291 for possible appropriate adaption to the facts of a particular real estate transaction. Each fact situation may vary so that under some circumstances DR 6-101(A)(2) may require counseling with the parties.

CONCLUSION

Under these facts, a lawyer's independent professional judgment, on behalf of one party would be likely to be adversely affected by the representation of the other party and hence a violation of DR 5-105(A) and/or (B) would exist unless the requirements of DR 5-105(C) are met. Thus, full disclosure by the Lawyer of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each, as well as the consent of each party thereafter to such representation, are prerequisites to such representation of both parties. DR 5-105(C). See Ethics Opinion 228 (1959) and Ethics Opinion 408 (1984). See also EC 5-14 and EC 5-15 and EC 5-16. See also Dillard v. Broyles, 633 S.W.2d 636 (Tex.App.--Ft. Worth 1982, ref. n.r.e.), certiorari denied, 103 S.Ct. 3539, 463 U.S. 1208. While the PEC observes that the present Texas Code of Professional Responsibility does not require that the consent of the parties be in writing, the committee cites for appropriate consideration of real estate practitioners a form of Dual Representation Disclosure and Consent Letter which appears in the March, 1987 Texas Bar Journal at pages 290 and 291 for possible appropriate adaption to the facts of a particular real estate transaction. Each fact situation may vary so that under some circumstances DR 6-101(A)(2) may require counseling with the parties.

Tex. Comm. On Professional Ethics, Op. 448 (1987)