Opinion No. 2001-01

(Inquiry No. )

An attorney’s permissible use of a standard real estate sales contract form.
Subject to the clarifications as described, an attorney may utilize a standard real estate sales contract form.
Code Provisions:
DR 1-102(A)(4),
DR 7-102(A)(5),
EC 7-38
Facts Presented:
Inquiring counsel has been presented with a real estate contract form indicating such form was prepared by named bar association committees and the New York Land Title Association, and wishes to know if his use of such form is proper.

According to inquiring counsel, he has been presented with a printed real estate contract with the legend at the top indicating the form had been prepared by various bar association committees and the New York Land Title Association. This form however, contains several material changes to the provisions of the approved form in use. Specifically, the form presented to the inquiring counsel requires the purchaser to pay the seller’s attorney a fee of $350.00 for attending a closing in New York City. Further, it limits the liability of a seller for repairs to $100.00 and requires the purchaser to pay the New York State Real Property Transfer Tax. Additionally, all of the aforementioned changes have been inserted into the form in the same typeface as the balance of the text.
Is it ethically permissible for an attorney to make use of such a form?
Unless the changes are clearly pointed out to the other party, an attorney may not use such a form.

The form presented by inquiring counsel clearly states that it has been approved by various bar association committees as well as the New York Land Title Association. However, the form presented is in fact not the approved form, but a variation of that form with significant modifications. The modifications are made in such a way that the attorney relying on the legend denoting the approved form could easily overlook these critical alterations.

Canon 1 of the Code of Professional Responsibility provides as follows:
“A lawyer should assist in maintaining the integrity and competence of the legal profession.”

DR 1-I02(A)(4) provides that:
“A lawyer or law firm shall not..engage in conduct involving dishonesty, fraud, deceit or misrepresentation.”

DR 7-102(A)(5) provides that a lawyer may not make a false statement of law or fact.

It is the essence of misrepresentation to pass something off as something other than what it actually is. This is precisely what the attorney proffering the form in question wishes to do.

Printed forms are commonly used in the practice of law. This is done in large part to avoid r, sated rereading of lengthy provisions. This does not preclude an attorney from varying the content of such a form, but such changes to the content may not be done in a misleading manner.

There are numerous methods by which an attorney may call to the attention of the opposing counsel the changes made to a form. For example, including the changes in a rider to the form contract would clearly suffice. Additionally, the changes could be noted in a cover letter or printed ii different typeface.

While the changes to a form contract must be determined by each attorney, the attorney has an absolute duty to scrupulously avoid misrepresentation. It is questionable whether the mere deletion of the legend denoting an approved form, but otherwise utilizing a deceivingly similar typeface, without otherwise signifying the material changes to the form contract, complies with the code.

It should also be noted that EC 7-38 provides that: “A lawyer should follow local customs of courtesy or practice, unless he or she gives timely notice to opposing counsel of the intention not to do so.”

It is customary in local real estate practice to designate changes to a known form contract by making such changes obvious to the reader. This EC 7-38 may dictate the same result even if the purported form does not contain an identifying logo.

Therefore, the form in question may not be used, unless the changes are clearly brought to the attention of the other party. Due to the fact that such use of the proffered form. without clearly denoting the changes to the printed form, is misleading and constitutes misrepresentation, it is prohibited as unethical conduct by the Code of Professional Responsibility.

{ Approved by the Executive Committee – Approved by the Full Committee}