Attorney Ethics

rozie123April 10, 2012

I am selling my home. We are having "issues" with this transaction that was scheduled to close at the end of March. The buyer of my buyer's house is represented by an attorney who is also representing her buyer. Is that even ethical? How does he fairly represent each party? Is this common? I am kind of going crazy as one of these parties is holding up 3 closings!!! If one party in the transaction is not playing fair how does he justify this to his other client?

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etr2002

I am an attorney and my ethical classes taught me a very basic principle - never attempt to represent more than one party because inevitably there will be conflicts and you will not be able to be neutral no matter how hard you try. At the very least, everyone involved in that transaction should have been asked to sign a waiver and consent before representation commenced. Unfortunately, you are not a party to that closing, so you don't have any input, but you should have included a clause in your contract that allows for revocation if there is an extensive delay in the closing. Also you may find that the atty isn't representing both parties but that is the perception of your buyer...very common misconception if someone is inexperienced in transactions and also naively trusting.

    Bookmark   April 10, 2012 at 9:10PM
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Billl

It is very common for 1 attorney to handle all the closing aspects, title etc

And frankly, 99% of the time, the only thing you would want an individual attorney to do is review the contract before you sign. Once that is done, the contract is going to trump everything else.

    Bookmark   April 11, 2012 at 9:00AM
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stephf

Not sure how it works in the U.S., but in Canada a lawyer can work for both parties to a transaction as long as each party recieves independent legal advice (basically they just "visit" another lawyer and sign a document that says that they are aware their lawyer is representing both parties and are aware of any risks involved in that). A lawyer that I used to work for would represent both parties if both were okay with that, but if a dispute arose, both parties would have to find new lawyers.

    Bookmark   April 11, 2012 at 9:33AM
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etr2002

Bill, you are right as to typical closings but not if there are disputes. An attorney is opening himself up to malpractice if he is holding himself out as an attorney for both sides and disputes arise which he then tries to mediate. There's not enough info about this scenario given by the original poster to know if the hold-up is financing or inspections or if someone is trying to breach the contract, so without that info then speculation is all anyone can provide.

Also, contracts may not always trump - there are defenses available for breach of contract...another reason 1 atty doesn't need to represent 2 parties when conflict arises.

    Bookmark   April 11, 2012 at 11:19AM
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cas66ragtop

There is nothing wrong with the settlement attorney representing both parties - this happens all the time. Your problem isn't really with the attorney - your real problem is that you accepted a contingency. It's a domino effect - one thing goes wrong somewhere in the chain and it effects everyone. This is why I never accept a contingency.

    Bookmark   April 11, 2012 at 1:22PM
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brickeyee

There is not all that much for an attorney to advise on by the time you get to the settlement table.

Some states do not even require an attorney to conduct a settlement, while others (by law or the bar raising hell) require an attorney to be present.

Review documents, pass them around for signature, make sure things are recorded properly , collect & release funds, and generally make sure all the paperwork is in order.

In Virginia the settlement companies often hire an attorney for a few hours just so they do not get the bar up in arms.

It is not uncommon for one party to pay and select the settlement attorney or company.

    Bookmark   April 11, 2012 at 1:43PM
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