Ethics Committee Formal Opinion #1989-90/1
Attorney’s Representation of Community Land Trusts
November 9, 1989
ANNOTATIONS:
In a setting involving a community land trust and a tenant cooperative, an attorney cannot undertake representation of one which could be materially limited by the lawyer’s responsibilities to another or to a third person unless the lawyer reasonably believes the representation will not be adversely affected and both the land trust and the cooperative consent after consultation and with knowledge of the consequences. (Rule 1.7)
In matters involving multiple representation, an attorney should apply “the harsh reality test” in making the threshold determination as to whether to proceed with representation. (Rule 1.7)
If the attorney decides that it is possible to proceed, the attorney must provide full and adequate disclosure of the potential circumstances and obtain the client’s or clients’ consent to proceed. (Rule 1.7)
Material limitations may arise not only from an attorney’s responsibilities to clients, but also from an attorney’s own interests. (Rule 1.7(b))
QUESTION:
As described by the inquiring attorney, Community Land Trusts (“CLT”) are a relatively new mechanism to provide affordable housing. A non-profit CLT buys or builds housing, helps tenants form a cooperative and then leases the building(s) to the cooperative under a long-term lease, typically 60 years or more. The CLT continues to own the fee interest and in the lease establishes a formula limiting the equity of the cooperative units to ensure long-term affordability for present and future occupants. All cooperative members must pay a nominal fee to be members of the CLT.