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Ezel / Ethics Opinions / NYSBA
NYSBA May 27, 2015

Can a city attorney buy property the city took in tax foreclosure and is reselling, and what conflict rules apply?

Short answer: Yes, if the purchase complies with government-ethics law, the lawyer does not advise the city (or supervise those who do) on property sales, and the lawyer holds no confidential city information bearing on the deal. If the lawyer does advise on sales or holds such information, the purchase or use is permitted only with the city's informed consent, given through a process that avoids any perception of being inconsistent with the public trust.

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This page answers the general question as of 2015. Ezel answers yours: whether it's allowed on your facts, under the current New York Rules of Professional Conduct, with citations.

Currency note: this opinion is from 2015
Subsequent statutory amendments, court decisions, or later opinions or rule amendments may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Disclaimer: Advisory only. Not binding precedent.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked on this page) is the authoritative source for any reliance.

Plain-English summary

An Assistant Corporation Counsel for a city handled the city's tax foreclosure matters, filing motions under Article 11 of the Real Property Tax Law and recording city tax deeds. The city resold foreclosed property through its Urban Renewal Agency (URA) or by public auction. The lawyer wanted to buy a property the URA was selling and asked whether that was permissible (¶¶ 1-3). The committee declined to opine on the government-ethics law (General Municipal Law Article 18), noting only that an illegal transaction reflecting on the lawyer's honesty or fitness would violate Rule 8.4(b), and assumed for the rest of the opinion that the purchase was lawful (¶ 4).

The committee distinguished two scenarios. If the URA acts as the city's agent so the lawyer is buying from the city, Rule 1.8(a) on business transactions with a client applies, but only where the client expects the lawyer to exercise professional judgment for its protection (¶¶ 5-9). The committee held that whether the city has that expectation depends on whether the lawyer is responsible for legal advice on property sales or supervises lawyers who are: if not, Rule 1.8(a) does not apply by its terms; if so, the lawyer may proceed only by meeting Rule 1.8(a)'s conditions (fair and reasonable terms, written advice to seek independent counsel, and informed written consent) (¶¶ 9-11). Because Rule 1.8 is the specific rule, it displaces the general personal-conflict rule 1.7(a)(2) where it applies, though Rule 1.7(a)(2) governs if Rule 1.8(a) does not (¶¶ 8, 13).

On government consent, the committee relied on N.Y. State 629 (1992): a government client may consent to a conflict if the lawyer is reasonably certain the entity is legally authorized to waive it and the consent process precludes any reasonable perception of being inconsistent with the public trust (¶ 12). It read its older opinions N.Y. State 470 (1977) and N.Y. State 558 (1988) as consistent, both turning on the lawyer's influence over the selling agency or access to its appraisal (¶¶ 14-15). If the city had transferred the property to the URA as owner, the purchase would not be with the client and neither Rule 1.8(a) nor 1.7(a)(2) would apply (¶ 16). Finally, under Rule 1.6(a), if the lawyer's foreclosure role gave the lawyer confidential city information that would advantage the lawyer in the purchase, the lawyer could use it only with the city's informed consent, regardless of who the seller was (¶ 17).

In practice

Under the New York rules as they stood at the time of the opinion, the committee made the answer turn on the lawyer's role and information rather than a flat permission or prohibition. Two clean-hands conditions let the lawyer buy without client consent: the lawyer must not be responsible for advising the city on property sales (or supervising those who are), and must hold no confidential city information that would advantage the purchase. Where the lawyer does advise on sales, Rule 1.8(a)'s business-transaction safeguards apply (fair terms, written advice to seek independent counsel, informed written consent), and where the lawyer holds relevant confidential information, Rule 1.6(a) requires consent to use it. For a government client, the committee added the N.Y. State 629 overlay: consent is valid only if the entity is legally authorized to give it and the process avoids any perception inconsistent with the public trust. The committee left the legality of the transaction and the Rule 1.7(a)(2) significant-risk question as fact and law questions for the lawyer.

Common questions

Q: Can a city attorney buy property the city is reselling after a tax foreclosure?

A: Yes, if the deal is lawful, the lawyer does not advise the city on property sales (or supervise those who do), and the lawyer holds no confidential city information bearing on it (¶ 18).

Q: What if the lawyer does advise the city on property sales?

A: Then Rule 1.8(a) applies, and the lawyer may buy only on fair and reasonable terms, after advising the city in writing to seek independent counsel, and with the city's informed written consent (¶ 11).

Q: Can a government client consent to such a conflict?

A: Yes, under N.Y. State 629, if the lawyer is reasonably certain the city is legally authorized to waive the conflict and the consent process precludes any reasonable perception of being inconsistent with the public trust (¶ 12).

Q: Does it matter if the lawyer learned things about the property through the foreclosure work?

A: Yes. Under Rule 1.6(a), if that role gave the lawyer confidential city information advantaging the purchase, the lawyer may use it only with the city's informed consent, whoever the seller is (¶ 17).

Background and rules framework

The opinion interprets New York Rule 1.8(a) (business transactions with a client), Rule 1.7(a)(2) (personal-interest conflicts), Rule 1.6(a) (use of confidential information), Rule 1.11 (current government lawyers; limits on agency consent), and Rule 8.4(b) (illegal acts reflecting on fitness), corresponding to ABA Model Rules 1.8, 1.7, 1.6, 1.11, and 8.4. The analysis turns on whether the city expects the lawyer to exercise professional judgment in the sale and on whether the lawyer holds confidential information bearing on the purchase.

Citations and references

Rules of Professional Conduct:

  • MR 1.8 / NY RPC 1.8(a) (business transactions with a client)
  • MR 1.7 / NY RPC 1.7(a)(2) (personal-interest conflicts)
  • MR 1.6 / NY RPC 1.6(a) (use of confidential information)
  • MR 1.11 / NY RPC 1.11 (current government lawyers; agency consent limits)
  • MR 8.4 / NY RPC 8.4(b) (illegal acts reflecting on fitness)

Statutes:

  • N.Y. General Municipal Law Art. 18 (conflicts of interest of municipal officers and employees)
  • N.Y. General Municipal Law § 553 (Urban Renewal Agency)

Cases:

  • D. Ginsberg & Sons, Inc. v. Popkin, 285 U.S. 204 (1932), specific provisions control over general

Other opinions cited:

  • N.Y. State 629 (1992): when a government entity may consent to a conflict
  • N.Y. State 470 (1977) and N.Y. State 558 (1988): city/agency lawyers barred from buying agency property where they influenced the sale or held its appraisal

See also

Source

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