If a real estate client insists on signing a transfer report that understates the purchase price, must the lawyer withdraw?
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This page answers the general question as of 1982. Ezel answers yours: whether it's allowed on your facts, under the current New York Rules of Professional Conduct, with citations.
Plain-English summary
The committee addressed a lawyer who represented the purchaser of a newly constructed home. The seller-builder was pressuring the buyer to sign a Board of Equalization and Assessment real property transfer report that would understate the cash purchase price by a material amount, listing only the "base price" and excluding extras such as a fireplace, veranda, central air conditioning, and an enclosed porch. The client told the lawyer he would do as the seller-builder asked. The committee was asked whether the lawyer could continue the representation.
The committee noted, without deciding the legal question, that N.Y. Real Property Law section 333-1(e) requires a transfer report stating the full sales price, and that N.Y. Penal Law sections 175.30 and 175.35 make it an offense to offer a public servant a filing known to contain false information. Assuming the lawyer concluded the proposed conduct was illegal, the committee held that DR 7-102(A)(7) bars a lawyer from counseling or assisting a client in conduct the lawyer knows to be illegal or fraudulent. It drew on N.Y. State 126 (1970) (a lawyer may not prepare usurious mortgage papers) and N.Y. State 455 (1976) (a lawyer may explain a course of conduct's legal character but may not encourage illegal acts).
The committee concluded that the lawyer should try to dissuade the client and explain the serious potential consequences. If the client rejects that counsel, the Code leaves the lawyer no choice but to withdraw under DR 2-110(B)(2). It cited N.Y. City 214 (1932) and N.Y. County 181 (1919), where committees directed withdrawal when a client persisted in fraudulent conduct. Under no circumstances may a lawyer assist a client in violating the laws the lawyer is duty bound to uphold (EC 1-5; DR 1-102). The question was answered in the negative.
Currency note
This opinion was issued in 1982, before New York replaced the Code of Professional Responsibility with the Rules of Professional Conduct in 2009 (the duty not to counsel or assist a crime or fraud now appears at Rule 1.2(d), mandatory withdrawal at Rule 1.16(a), and misconduct at Rule 8.4). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.
Common questions
Q: Can a lawyer help a client file a real estate transfer report that understates the price?
A: No. The committee concluded that, where the lawyer believes the conduct is illegal, DR 7-102(A)(7) bars assisting it, and the lawyer must decline to participate.
Q: What must the lawyer do before withdrawing?
A: The opinion said the lawyer should explain the serious potential consequences of the improper conduct and urge the client not to engage in it.
Q: What happens if the client insists on going forward anyway?
A: The committee held the lawyer must withdraw from the representation under DR 2-110(B)(2); the Code leaves no other choice once the client rejects the lawyer's counsel.
Background and rules framework
The opinion applied DR 7-102(A)(7) (a lawyer shall not counsel or assist a client in conduct the lawyer knows to be illegal or fraudulent), DR 2-110(B)(2) (mandatory withdrawal), DR 1-102, and EC 1-5 to a client determined to file a materially false transfer report. The closest current Model Rule analogues are Rule 1.2(d) (limits on assisting crime or fraud), Rule 1.16(a) (mandatory withdrawal), and Rule 8.4 (misconduct).
Citations and references
Rules of Professional Conduct:
- MR 1.2(d) (counseling or assisting crime or fraud)
- MR 1.16(a) (mandatory withdrawal)
- MR 8.4 (misconduct)
- NY DR 7-102(A)(7), DR 2-110(B)(2), DR 1-102, EC 1-5
Statutes:
- N.Y. Real Property Law section 333-1(e) (full sales price on transfer report)
- N.Y. Penal Law sections 175.30, 175.35 (offering a false instrument for filing)
Other opinions cited:
- N.Y. State 126 (1970): a lawyer may not prepare usurious mortgage papers
- N.Y. State 455 (1976): a lawyer may explain legal consequences but not encourage illegal acts
- N.Y. City 214 (1932); N.Y. County 181 (1919): withdrawal required when a client persists in fraud
See also
Source
- Landing page: https://nysba.org/opinion-545/
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