Could one Vermont lawyer represent both lender and borrower at a real estate closing?

Plain-English summary

The committee reconsidered its earlier rule against representing both a lender and borrower in the same real estate closing. Under Rule 1.7, it allowed joint representation when the lawyer reasonably believed neither client relationship would be adversely affected, the lawyer’s judgment would not be materially limited, and each client consented after consultation.

The consultation had to occur sufficiently before closing for either client to choose separate counsel. It had to cover the implications, advantages, and risks of common representation. The opinion said a dispute during the engagement could require withdrawal from both clients, and it continued to disapprove joint representation of buyer and seller. It cited Rule 4.3 for the different situation of lender counsel dealing with an unrepresented borrower.

The committee also permitted lawyers to form a title and escrow company. It said a separate entity did not insulate lawyers from professional conduct rules when they provided legal or law-related services. It treated title searches and judgments about encumbrances as legal practice, while discussing Rule 5.7 for law-related services.

Currency note

This opinion was issued in 2001, before the Vermont Supreme Court's 2009 amendments to the Rules of Professional Conduct. The court's rules history says those amendments incorporated changes to the ABA Model Rules adopted in 2001-2003. 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 Treat this page as historical context, not current guidance.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.

Common questions

Q: Did the opinion allow all lender-borrower joint representation?

A: No. The committee conditioned it on the lawyer’s reasonable belief about both representations and each client’s consent after timely consultation.

Q: Could consultation wait until the closing table?

A: No. The opinion required consultation early enough to allow either party to obtain independent counsel.

Q: What if a dispute arose between lender and borrower?

A: The opinion said the lawyer would have to withdraw and could not represent either party in that dispute.

Q: Did a separate title company remove lawyer ethics duties?

A: No. The committee said the rules still applied to attorneys providing legal or law-related services through the company.

Background and rules framework

The opinion interpreted Vermont Rule 1.7(a) and (b), discussed Rules 1.9 and 4.3, and applied Rule 5.7 to law-related services. It expressly revised the committee’s earlier lender-borrower position in Opinion 90-8 and cited Opinions 94-8, 95-03, and 95-09.

Citations and references

Vermont Rules of Professional Conduct:

• Rules 1.7(a), 1.7(b), 1.9, 4.3, 5.7

Cases:

• Hunter Broadcasting v. City of Burlington, 164 Vt 391 (1995), title diligence discussed
• Bianchi v. Lorentz, 166 Vt 555 (1997), title diligence discussed
• Estate of Fleming v. Nicholson, 168 Vt. 495 (1998), title diligence discussed

Other opinions cited:

• Vermont Advisory Ethics Opinions 90-8, 94-8, 95-03, and 95-09

See also

• Vermont Ethics Op. 02-04: Trust account funds

Source

• Landing page: VBA conflict of interest opinions
• Original PDF: Vermont Advisory Opinion 01-02
• Rules history: Vermont Rules of Professional Conduct, “The Vermont Rules of Professional Conduct are amended to incorporate comprehensive and significant changes to the American Bar Association's Model Rules of Professional Conduct.”