In re Opinion 710 of the Advisory Committee on Professional Ethics

The New Jersey Advisory Committee on Professional Ethics (the committee) was asked to rule on a hypothetical real estate deal in which the parties intentionally inflated the sale price, causing the buyer's lender to loan more than was warranted, while the seller gave the buyer a purchase credit — a seller's concession — equal to the inflated amount. The committee issued Opinion 710, concluding it would be unethical for a lawyer to draft such a concession and suggesting the lawyer could face fraud liability toward the lender. The New Jersey State Bar Association, responding to requests for clarification, asked the state supreme court to review Opinion 710.