May a lawyer, under the facts below stated, properly represent both parties to a real estate transaction (Seller and Buyer) by preparing instruments of conveyance and instruments of indebtedness and security without having any personal contact with such parties under the facts stated below?
Lawyer was delivered an Earnest Money Contract signed by Seller and Buyer listing his firm as attorney representing both Seller and Buyer. The Contract indicated the necessity of a "wraparound mortgage" although it was silent concerning any special clauses and which might favor or be for the interest of either party. The Contract involved did not contemplate a simple or routine purchase and sale, but rather required preparation of instruments which might or might not contain elaborate clauses not apparently addressed by the parties in the striking of their deal. Lawyer had no contact with either Seller or Buyer concerning the transaction, but proceeded to prepare a Warranty Deed retaining Vendor's Lien, a Deed of Trust, and a Note with a Deed of Trust to securing a Second Lien, disavowing any attempt to favor one party over the other.
Under these facts, a lawyer's independent professional judgment, on behalf of one party would be likely to be adversely affected by the representation of the other party and hence a violation of DR 5-105(A) and/or (B) would exist unless the requirements of DR 5-105(C) are met. Thus, full disclosure by the Lawyer of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each, as well as the consent of each party thereafter to such representation, are prerequisites to such representation of both parties. DR 5-105(C). See Ethics Opinion 228 (1959) and Ethics Opinion 408 (1984). See also EC 5-14 and EC 5-15 and EC 5-16. See also Dillard v. Broyles, 633 S.W.2d 636 (Tex.App.Ft. Worth 1982, ref. n.r.e.), certiorari denied, 103 S.Ct. 3539, 463 U.S. 1208.
While the PEC observes that the present Texas Code of Professional Responsibility does not require that the consent of the parties be in writing, the committee cites for appropriate consideration of real estate practitioners a form of Dual Representation Disclosure and Consent Letter which appears in the March, 1987 Texas Bar Journal at pages 290 and 291 for possible appropriate adaption to the facts of a particular real estate transaction. Each fact situation may vary so that under some circumstances DR 6-101(A)(2) may require counseling with the parties.