This is an opinion of the ARDC review board, the final step before a disciplinary matter goes before the Illinois Supreme Court. The ARDC charged the lawyer with failing to disclose her financial interest in six real estate closings because she was the title agent. Moreover, in four transactions the lawyer represented both buyer and seller.
Lawyers often act as title agents in real estate transactions. Acting as a title agent is very common. This opinion tells lawyers that they must disclose that they are acting as a title agent. Failure to disclose this conflict of interest (even though this occurs every day in Illinois) is misconduct.
The opinion recites the facts of one transaction:
“Percy Wicks testified that, in the process of selling his house in the summer of 2006, he asked Respondent to help him obtain some documents from his homeowner’s association. Respondent was already representing the buyers of Wick’s property, Maggie Matos and John Holton. Respondent agreed to help Wicks for a $500 fee. She told Wicks that she represented the buyers but did not make any disclosures about possible conflicts that could arise from representing both parties. At the closing, Respondent told Wicks that she would answer any questions he had. Based on the $500 fee that he paid, Wicks believed that Respondent was representing him at the closing. Respondent did not tell Wicks that she was acting as title agent for the closing and receiving a commission from Ticor.
The Hearing Board found that Respondent failed to explain matters to the extent reasonably necessary to permit her clients to make informed decisions about the representation, in violation of Illinois Rule of Professional Conduct (“Rule”) 1.4(b); engaged in conflicts of interest, in violation of Rule 1.7(a); failed to obtain her client’s informed consent for her representation, in violation of Rule 1.7(b); failed to explain the implications of common representation, in violation of Rule 1.7(c); breached her fiduciary duty; and engaged in conduct that brought the legal profession into disrepute, in violation of Supreme Court Rule 770.”
The Review Board urged a suspension of 90 days.
This is an unfortunate result as the lawyer was disciplined in a $500 fee matter. The benefit of this decision is that every real estate lawyer is on notice that (a) representing the buyer and seller in a transaction without a written conflict waiver and (b) acting as a title agent without disclosing it can lead to discipline.
Edward X. Clinton, Jr.