Question

A real estate lawyer who is acting for the purchaser and lender learns of an addendum to the price. What must the lawyer do?

Answer 1

A real estate lawyer learning of an addendum to the price must promptly disclose the information, adjust any legal documents, and adhere to ethical guidelines to maintain transparency with their client and lender.

Step-by-step explanation:

When a real estate lawyer is made aware of an addendum to the price, particularly in the context of representing both the purchaser and the lender, the lawyer has a professional obligation to disclose this information promptly. As part of their duty, they must maintain transparent communication between all parties involved and ensure that any changes in terms (such as price adjustments) are relayed to their clients and any necessary adjustments are made to the contracts or legal documents in a timely manner. The lawyer must act in accordance with the ethical guidelines that govern attorney conduct, and must avoid any conflicts of interest, while ensuring that their client is fully informed and consented to any changes before proceeding.

Answer 2

1. Review the addendum: The lawyer must carefully review the addendum to understand its terms and implications. This includes examining any changes in the purchase price, payment terms, or any other relevant provisions.

2. Communicate with the client: The lawyer should promptly inform the purchaser and lender about the addendum and its contents. They should provide a detailed explanation of the addendum's impact on the transaction and seek further instructions from the client.

3. Negotiate or seek clarification: If the addendum raises concerns or requires further negotiations, the lawyer should engage in discussions with the other party involved, such as the seller's lawyer or the listing agent. They may negotiate any necessary changes or seek clarification on any ambiguous terms.

4. Update legal documentation: If the addendum results in changes to the purchase agreement or any other legal documents, the lawyer must ensure that these changes are accurately reflected in the updated documentation.

5. Protect the client's interests: Throughout the process, the lawyer's primary responsibility is to protect the interests of their clients. They must advise the purchaser and lender on the legal implications of the addendum and provide guidance on how to proceed based on their best interests.