Question. I am a real estate agent and my husband is an attorney who handles real estate matters. Can my husband represent a lender, buyer or seller in a transaction in which I am participating as a real estate agent?
This month’s question actually comes from my wife Kleo, and some of her clients. While it would seem to be natural for attorney and real estate agent spouses to refer business to one another the New York State Bar Association has opined that it is not permissible for an attorney to represent any party in a real estate transaction in which he or she has a personal interest in the outcome. In Kleo’s situation her financial interest in seeing that the transaction be completed so that she may be paid her commission is imputed to me as her husband thereby preventing me from being able to represent any other party in the transaction. It is irrelevant whether Kleo would be representing the buyer and I the seller or vice versa. The same preclusion would apply for any other member or associate in my firm regardless of how impenetrable a “Chinese Wall” the firm can craft.
It is not clear based upon my research whether the conflict is one that can be waived by the potential client. However, I would suggest that the economics of the matter weigh against an attorney risking an ethical violation if the waiver is not permitted or is somehow ineffective.
If anyone would like to see the research upon which this month’s answer is based please feel free to contact me.