NEW YORK STATE BAR ASSOCIATIONProfessional
Ethics Committee Opinion
Opinion #38 - 12/06/1966
Topic: Conflict of Interest, Representation of Adverse Parties
Digest: Lawyer may not represent both buyer and seller of real estate
where there is a clear instance of conflicting interests
Canon: Former Canon 6
Is it ethically proper for a lawyer who represents a party to a real
estate transaction to undertake also the representation of an adverse
party, assuming such representation would ordinarily involve merely
computing the adjustments and preparing the deed, or where title
insurance is not used, the preparation also of a title abstract?
Would the answer be different if a subdivision were involved in
which an access road is required to be built but there is no agreement
as to who is to build the road?
Canon 6 of the canons of Professional Ethics provides as follows:
"6. Adverse Influences and Conflicting Interests
"It is the duty of a lawyer at the time of retainer to disclose to
the client all the circumstances of his relations to the parties, and
any interest in or connection with the controversy, which might
influence the client in the selection of counsel.
"It is unprofessional to represent conflicting interests, except by
express consent of all concerned given after a full disclosure of the
facts. Within the meaning of this canon, a lawyer represents
conflicting interests when, in behalf of one client, it is his duty to
contend for that which duty to another client requires him to
"The obligation to represent the client with undivided fidelity and
not to divulge his secrets or confidences forbids also the subsequent
acceptance of retainers or employment from others in matters adversely
affecting any interest of the client with respect to which confidence
has been reposed.
Dual representation should be practiced sparingly and only when it is
clear that neither party will suffer any disadvantage from it. It is
difficult to justify, except in unusual and very limited circumstances,
and only after complete disclosure and consent, with a clear
understanding by both parties of its possible effect on their respective
interests. [Legal Ethics by Henry s. Drinker, page 104 (1954),
Legal Ethics by Raymond L. Wise, page 141 (1966).] The lawyer who
represents conflicting interests acts at his peril and should realize
that the thrust of Canon 6 is to discourage acceptance of such
The attorney has the affirmative duty to be certain that the clients
have the capability and actually do fully understand the conflicts that
may arise and the peculiar position dual representation may cause them
to be placed in.
In real estate transactions it is not always true, even in relatively
simple ones, that representation of both buyer and seller involves
nothing but computations of adjustments and preparation of the
A number of questions arise that require the exercise of legal
judgment. Examples are (i) whether the deed should be full
covenant and warranty, bargain and sale, with or without covenants, or
quiteclaim, (ii) what customs are to be followed in making adjustments,
(iii) which points disclosed in the title report are important and which
may be disregarded, (iv) what title company to use, considering the fact
that a title company reinsuring may perpetuate past errors which another
title company would pick up.
The inquiry makes special reference to the necessity of having an
access road to the property being transferred. This will involve
negotiations in which dual representation is virtually impossible.
In Informal Opinion No. 886-9/28/65 the Committee on Professional
Ethics of the American Bar Association passing upon the propriety of
dual representation in a real estate development said "we suggest that
the attorney for the developer would be ill-advised to in any way
represent the buyers."
One authority says, "The prudent lawyer would be wise never to put
himself in a position of representing conflicting interests "Legal
Ethics by Raymond L. Wise, page 141 (1966).