There are some situations when it is not possible to have the same lawyer represent both the vendor and the purchaser. These situations include family transfers, which are not considered arm’s length transactions. When this happens, the attorney has to choose a third party. This attorney is not allowed to represent both the vendor and the purchaser, due to the conflict of interest.
One common situation where this can occur is in a real estate transaction between a seller and a purchaser. The lawyers for both parties are part of a law firm. The lawyers will prepare a contract of sale, and the attorney will deposit the downpayment to an escrow account. This downpayment is usually about 10% of the total purchase price in New York State. If the buyer decides to walk away from the deal, the downpayment will be lost.
