Is it worth it to use an attorney who is also a broker?

Question

Question - I am looking at buying a commercial unit with 3 tenants. One of the leases is a bit strange so I inquired about it to my broker who said I needed to speak with an attorney. I just found these guys in San Diego who will represent me legally and also act as my real estate broker on the deal.

Are there any conflicts here? They are based in San Diego where the property is, thinking that if I can handle it all under one house it may be cheaper and easier, but again I have only used brokers and only done two deals.

https://www.equitylegalllp.com/

Tom Gimer · Answer

You can't just switch brokers if the first introduced this property to you. Check your paperwork.

As to the other question, I'd rather my real estate broker be an attorney. And that portion of the rule being quoted regarding the attorney acquiring an interest adverse to the client should be omitted... it doesn't apply in this situation.

Chris Carson · Answer

@Rob K. is correct. There can be a conflict of interest that arises when a lawyer wears both hats as a realtor/broker and an attorney. I am both a lawyer and an agent but I don't mix the two. It helps that real estate is not what I do in my practice, but I am always very cautious about steering clear that exact issue. I can imagine situations where it would be helpful to have the knowledge combined in one person. That said, you don't want to end up with a jack of all trades master of none in a complex transaction.

Rob K. · Answer

Yes. When an attorney in California engages in a brokerage transaction with a client in addition to providing legal services, they are  engaging in a business transaction with a client. California Rules of Professional Conduct, Rule 3-300 states:

"A member shall not enter into a business transaction with a client; or knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client, unless each of the following requirements has been satisfied:

(A) The transaction or acquisition and its terms are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner which should reasonably have been understood by the client; and (B) The client is advised in writing that the client may seek the advice of an independent lawyer of the client’s choice and is given a reasonable opportunity to seek that advice; and (C) The client thereafter consents in writing to the terms of the transaction or the terms of the acquisition."

Damon DiPlacido · Answer

I had the same question as Tom Gimer....and want to make sure I understand this correctly: 1. you indicate you already have a broker on a property you are evaluating to buy; 2. Your broker recommends you seek legal counsel regarding a legal question you had; 3. You contact an attorney for the legal matter, who then pitches you on his brokerage services on a site you are already working with a broker on. Am I reading your post correctly? If I am reading this correctly, and if I was the original broker, I would seriously question our relationship going forward.

Setting this question aside, I checked out the firm's website. They are a real estate law firm, who, it appears, has preferred relationships with brokers that they work with and farm the business out to. If you look at their website the only names you see are to the two attorneys, who based on their profiles are full time attorneys with no mention of brokerage work or expertise.  When you click on their 'Real Estate Brokerage' page, there are no broker profiles listed and they say  "...we launched Equity Realty, a real estate brokerage that works in collaboration with our law firm."

There's nothing wrong with what they are doing, but I wonder if you have a clear understanding of their business structure.

Peter Banyan · Answer

Personally, as a realtor working everyday with cell phone apps that connect me to my clients even when on the golf course, and being active in the market by timely update alerts. I just feel full time professionals are the way to go. Divided time of someone I would ask for professional help in a financial matter would not be a choice for me no matter the credibility of those who seek my business. Just my own opinion.

David H. · Answer

Can you elaborate on this for me? I am thinking to get the most unbiased info you would have two reps. But at the same time if a broker also has legal experience and can answer questions then this is making more sense, at least for this transaction. Here is the Brokerage page  (San Diego Estate Brokerage) .

However, I can see more for residential where it may be required to separate the roles, but the last agent I worked with was super motivated for his commission. Not that this is bad as everyone has to get paid for a job performed, it just didn't feel like there was a fiduciary duty. Wouldn't an attorney even have more strict rules when it comes to this?

Is it worth it to use an attorney who is also a broker?

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