Can a lawyer buy a struggling client's property and lease it back to them while representing them?

Plain-English summary

The inquiry proposed a form of financial assistance to clients: the lawyer would purchase property from clients who could not meet their mortgage payments and lease the property back to them, with an option to purchase.

The committee was of the opinion that RPC 1.8(e) would prohibit the kind of financial assistance set out in the inquiry. It also directed attention to In re McGlothen, 99 Wn.2d 515, 663 P.2d 1339 (1983), as a decision discussing some of the issues the inquiry raised.

Currency note

This opinion was issued in 1987, before the Washington State Bar Association's adoption of the 2006 revisions to 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 Treat this page as historical context, not current guidance.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 mentioned here.

Common questions

Q: Can a lawyer buy a client's home and rent it back to keep the client housed?

A: Per the committee, no. It concluded RPC 1.8(e) prohibits the proposed purchase-and-leaseback as financial assistance to the clients.

Q: Did the committee point to any authority beyond the rule?

A: Yes. It directed attention to In re McGlothen, 99 Wn.2d 515, 663 P.2d 1339 (1983), as discussing some of the issues the inquiry raised.

Background and rules framework

The opinion applied RPC 1.8(e) (the bar on a lawyer providing financial assistance to a client in connection with litigation, corresponding to ABA Model Rule 1.8(e)). The committee read the proposed purchase of the clients' property and leaseback with an option to purchase as the kind of financial assistance the rule prohibits, and cited a Washington Supreme Court decision as related authority.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 1.8(e) (financial assistance to clients); Washington RPC 1.8(e)

Cases:

• In re McGlothen, 99 Wn.2d 515, 663 P.2d 1339 (Wash. 1983), cited as discussing issues raised by the inquiry

See also

• WSBA Ethics Op. 1105: Guaranteeing a Client's Loan
• WSBA Ethics Op. 1110: Promissory Note for Unpaid Fees
• WSBA Ethics Op. 1145: Guaranteeing a Settlement

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1143

Original opinion text

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

Advisory Opinion: 1106
Year Issued: 1987
RPC(s): RPC 1.8(e)
Subject: Lawyer providing financial assistance to clients

The Committee was of the opinion that Rule 1.8(e) would prohibit a lawyer from providing the kind of financial assistance set out in your inquiry. [The lawyer proposed purchasing property from clients who cannot meet their mortgage payments and leasing the property back to the clients, with an option to purchase]. The Committee also directed me to call your attention to In re McGlothen, 99 W.2d 515, 663 P.2d 1339 (1983) which discusses some of the issues raised by your inquiry.