Opinion No. 1997-7

(Inquiry No. )

Propriety of agreeing that future fee be paid from proceeds of sale of residence after eviction of tenant.
An attorney retained to represent a plaintiff in a litigation to evict a defendant from a residence owned by plaintiff may agree that future fees will be paid out of the proceeds of the sale of the residence once the defendant is evicted, but the attorney may not accept a proprietary interest in the subject premises via a tenancy in common with his client.
Code Provisions:
DR 5-103(a)
EC 5-3
EC 5-7 >br />
Facts Presented:
Inquiring counsel represents the owner of a residence in an on-going litigation to evict a defendant from the residence. Inquiring counsel submits a proposed retainer agreement which provides in relevant part that future payments for attorneys’ fees

… will not become due and payable until and unless our efforts to evict [the defendant] are successful. You agree that at the time, you will sell the premises forthwith and pay my outstanding statements out of the proceeds of the sale. You also agree that, if you decide to settle the matter on terms that do not involved [the defendant]’s vacating premises or allowing you to sell the Premises, I will nevertheless be entitled to be paid for my outstanding statements.


Does the proposed retainer violate the Code?
Determination: No, because the client has the option of not selling the premises in question.
Inquiring counsel cites our opinion 85-6 which rejected as violative of DR 5-103 a proposed agreement by which the attorney would have obtained a tenancy-in-common in the subject premises with his client.

In the instant matter, however, the proposed agreement ultimately allows the client the complete option of settling the matter on terms which do not require eviction of the defendant or sale of the premises while at the same time continuing the client’s responsibility for fees.

We express no opinion at this time as to the propriety of unequivocally requiring the sale of a client’s property to satisfy an attorney’s fees.

[Approved orally by the Executive Committee on Oct. 21, 1997; approved by the Full Committee on Oct. 29, 1997.]