Ezel / Ethics Opinions / VTBAR

Could a Vermont lawyer act only for a mortgage lender at a closing without also representing the borrower?

Short answer Opinion 94-08 allowed a lender-paid lawyer to handle the lender's closing work if the lawyer did not directly or indirectly represent the borrower. The borrower had to understand the lender-only role, and the lawyer could not give the borrower legal advice beyond suggesting separate counsel.
Bar
VTBAR
Issued
1994
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1994. Ask about yours and see what the current Vermont Rules of Professional Conduct say for your facts, with citations.

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 Not binding precedent.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

A lender proposed hiring and paying a lawyer to search title, prepare loan documents, attend closing, and complete other work for the lender's mortgage loan. The lender would tell the borrower that its lawyer represented only the lender and that the borrower could hire separate counsel. The committee distinguished earlier opinions rejecting joint lender-borrower representation because this lawyer's engagement was lender-only.

The committee said the lawyer could explain documents from the lender's perspective while renewing the warning that the lawyer represented only the lender. If the borrower asked for advice beyond the lender's view, the lawyer's response was to suggest independent counsel. Advising the borrower about title or contract terms unrelated to the lender's interest could create unintended representation and violate former DR 7-104(A).

The committee also allowed the lender's lawyer to tell the borrower an owner's title insurance policy was available, and to issue that policy on the borrower's request, within the scope of the lender representation described.

Currency note

This opinion was issued in 1994, before Vermont's 1999 adoption of the Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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 preparing closing documents automatically make the borrower a client?

A: No. The committee allowed lender-side closing work when the lawyer's role remained limited to representing the lender.

Q: Could the lender's lawyer answer the borrower's questions about the borrower's legal rights?

A: The opinion limited the lawyer to the lender's perspective and said questions requiring other legal advice should be referred to the borrower's own counsel.

Background and rules framework

The committee applied former DR 7-104(A) on communications with an unrepresented person. It distinguished its Opinions 90-8 and 79-23, which considered proposed joint lender-borrower representation.

Citations and references

Former Vermont disciplinary rules:

  • DR 7-104(A).

Other opinions cited:

  • Vermont Opinions 90-8 and 79-23.

See also

Source

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