The Florida Bar
PROFESSIONAL ETHICS OF THE FLORIDA BAR
September 29, 1964
September 29, 1964
It is improper for a mortgage company attorney to charge a seller an attorney's fee in the absence of any agreement between the attorney and the seller. It is not improper for the attorney to collect a reasonable fee for his services, provided the seller has agreed with the buyer to pay all closing costs, and provided the fee is part of the closing costs.
Canons: 6, 35
Chairman Smith stated the opinion of the committee:
The following factual situation is posed by a member of The Florida Bar: Seller agrees to sell his home to Buyer and is required by his agreement to furnish to Buyer a warranty deed. Buyer secures financing for the purchase through a mortgage company. An attorney employed by the mortgage company prepares the deed and all closing papers and handles the closing. Buyer is represented by his attorney. Seller has no attorney, but is charged an attorney's fee by the mortgage company attorney.
He asks (a) if it is ethical for the mortgage company attorney to charge Seller an attorney's fee in the absence of any agreement and (b) if such charge is ethical if Seller agrees with Buyer to pay all closing costs.
This Committee generally declines to render opinions on matters pending before a Grievance Committee. For that reason, and because the inquiry is pursuant to complaints made to a prosecuting officer, two members of the Committee decline to respond to the inquiry.
Three members of the Committee respond as follows. It is improper for the mortgage company attorney to charge Seller an attorney's fee in the absence of any agreement between the attorney and Seller. It is not improper for the attorney to collect a reasonable fee for his services provided Seller has agreed with Buyer to pay all closing costs and providing the fee is part of the closing costs.
In this case, the payment is made because of Seller's obligation to pay closing costs, not because of any obligation on the part of Seller to the mortgage company attorney. The fee must be reasonable and within the contractual agreement between Buyer and Seller. Further, Seller should be fully advised of the circumstances because the attorney represents the lending institution, not Seller, and the interest of these parties could well be in conflict. Preferably Seller should be represented by an attorney of his own choice.