Ezel / Ethics Opinions / VSB
VSB July 25, 1986

Can a lawyer represent a client in a matter where the lawyer stands to buy the disputed property on favorable terms?

Short answer: The committee concluded a lawyer with a personal financial interest in the disputed property must either decline the representation or proceed only after disclosing that interest, particularly the favorable purchase price, and obtaining the client's consent. It was decided under Virginia's former Code of Professional Responsibility.

Apply this to your situation

This page answers the general question as of 1986. Ezel answers yours: whether it's allowed on your facts, under the current Virginia Rules of Professional Conduct, with citations.

Currency note: this opinion is from 1986
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 Not binding precedent.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 on this page as a PDF) is the authoritative source for any reliance.
View original ethics opinion (PDF)

Plain-English summary

The committee considered an attorney representing his aunt in the rescission of an agreement under which the aunt's niece and the niece's husband had agreed to buy real estate. The mortgage on the property was in default, and the lender had agreed to loan the attorney the money to buy that same property. The committee found this gave the attorney a personal financial interest, particularly in the favorable purchase price, that conflicted with his representation.

On those facts, the committee concluded the attorney must either choose not to represent the aunt, or represent her only after advising her of his personal interest, particularly the favorable purchase price, and obtaining her consent to the representation in the rescission matter, citing DR 5-101 and DR 5-105(C).

Currency note

This opinion was issued in 1986, under Virginia's former Code of Professional Responsibility, before the Virginia State Bar's adoption of the Rules of Professional Conduct effective January 1, 2000. The committee note records that under current Rule 1.8(a), a lawyer may not enter into a business transaction with a client unless the client is given an opportunity to seek independent advice and there has been full disclosure and consent in writing. 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 represent a client when the lawyer might buy the disputed property cheaply?

A: Under this 1986 opinion, only after disclosing that personal interest, particularly the favorable purchase price, to the client and obtaining consent; otherwise the lawyer must decline.

Q: What was the source of the conflict the committee identified?

A: The lender's agreement to finance the attorney's purchase of the same property in dispute, giving him a personal interest in the outcome and the price.

Background and rules framework

The opinion applies the former Code's DR 5-101 (refusing employment where the lawyer's own interests may affect his judgment) and DR 5-105(C) (representation despite a conflict only with consent after full disclosure). The committee note maps the question onto current Virginia Rule 1.8(a) on business transactions with clients, the subject covered by ABA Model Rules 1.7 and 1.8(a).

Citations and references

Rules of Professional Conduct:

  • DR 5-101 (lawyer's own interests affecting professional judgment) (former Code)
  • DR 5-105(C) (representation despite conflict only on consent after full disclosure) (former Code)
  • Virginia Rule 1.8(a) / ABA Model Rules 1.7, 1.8(a) (personal-interest conflicts; business transactions with clients)

See also

Source

Original opinion text

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

LEGAL ETHICS OPINION 814

CONFLICT OF INTEREST - PERSONAL
INTEREST IN LITIGATION.

An attorney represents his aunt with regard to the rescission of an agreement between
the aunt and her niece and her niece's husband for the purchase of real estate. The
mortgage on the real estate is in default and the lender has agreed to loan the attorney the
money for the purchase of the same property. It is the opinion of the committee, given the
above circumstances, that the attorney either choose not to represent his aunt in the given
situation or, to represent his aunt only after advising the aunt of his personal interest,
particularly with regard to the favorable purchase price, and obtaining her consent to his
representation in the rescission matter. [ DR:5-101, DR:5-105(C)]

Committee Opinion
July 25, 1986

Legal Ethics Committee Notes. – Under Rule 1.8(a), a lawyer may not enter into a
“business transaction” with a client unless the client is given an opportunity to seek
independent advice, and there has been full disclosure and consent in writing.

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