Could one Vermont lawyer represent both a residential borrower and the mortgage lender, or provide the lender with title work while representing only the buyer?
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This page answers the general question as of 1990. Ask about yours and see what the current Vermont Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
The committee considered several residential-financing arrangements, including a traditional bank loan, an out-of-state mortgage company's closing, and a bank policy requiring its own lawyer to conduct the closing at the borrower's expense. The central question was whether one lawyer could represent both borrower and lender.
Under DR 5-105(C), dual representation required it to be obvious that the lawyer could represent each client adequately and required each client's consent after full disclosure. The committee concluded that neither requirement could be met. Conflicts could arise over the borrower's financial information, loan terms, closing requirements, title conditions, or delayed disbursement. Information that lender's counsel would ordinarily communicate to the lender could also be confidential information that borrower's counsel could not disclose under DR 4-101.
The committee also concluded that a typical residential borrower could not give knowing, voluntary, and intelligent consent to the dual role. It contrasted the lender's sophistication with the borrower's dependence on counsel to understand the closing papers and noted the lawyer's continuing economic interest in the institutional-lender relationship.
The per se bar did not turn routine delivery of documents or title products into representation of the lender. Buyer's counsel could give the lender a title opinion or title insurance, prepare a proposed mortgage deed, and satisfy similar loan requirements if those services were performed for the buyer and the lender understood that the lawyer did not act for it.
Currency note
This opinion was issued in 1990 under Vermont's former Code of Professional Responsibility, before the Vermont Supreme Court promulgated the Vermont Rules of Professional Conduct in 1999. 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 Treat this page as historical context, not current guidance.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: Could one lawyer represent both the borrower and lender if each consented?
A: No. The committee concluded that the foreseeable conflicts prevented a finding that one lawyer could adequately represent both, and that the typical residential borrower could not provide the consent DR 5-105(C) required.
Q: Why did the committee consider the interests potentially adverse?
A: It identified the borrower's confidential financial information, financing terms, loan-document review, lender closing requirements, title conditions, and possible postponement or escrow as points where the parties' interests could diverge.
Q: Could buyer's counsel deliver a title opinion or title insurance to the lender?
A: Yes, if counsel acted only for the buyer and the lender knew the work was being performed on the buyer's behalf rather than as legal services for the lender.
Q: Did preparing a proposed mortgage deed for the lender create an attorney-client relationship?
A: Not by itself. The opinion treated that work like a seller's lawyer preparing a deed for the buyer's benefit: beneficial work for another party did not alone create an attorney-client relationship.
Background and rules framework
DR 5-105 governed declining or continuing multiple employment, consent, and imputation within a firm. DR 5-107 addressed third-party compensation and interference with professional judgment, and DR 4-101 protected confidential information. The opinion also quoted 9 V.S.A. § 42(b), which allowed a borrower to obtain an acceptable title opinion, abstract, or hazard insurance from a provider of the borrower's choice.
Citations and references
Vermont Code of Professional Responsibility:
- DR 4-101
- DR 5-105(A)-(D)
- DR 5-107(A)-(B)
Statutes:
- 9 V.S.A. § 42(b)
Cases:
- Matter of Dolan, 384 A.2d 1076 (N.J. 1978) (Pashman, J., concurring and dissenting)
Other opinions cited:
- Vermont Professional Responsibility Committee Opinion 73.6
- Vermont Professional Responsibility Committee Opinions 78-4 and 79-23
- Massachusetts Bar Association Ethics Opinion 90-3
- New Hampshire Bar Association Ethics Committee article, New Hampshire Bar newsletter (June 6, 1990)
See also
- Vermont Ethics Op. 79-16: Lawyer as title-insurance agent
- Vermont Ethics Op. 80-03: Prior title work and boundary dispute
- NY State Bar Op. 753: Lawyer-owned mortgage and title company
Source
- Landing page: VBA Title Insurance opinions
- Original PDF: Vermont Advisory Opinion 90-08
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