1.23 Trustees

• Library: Real Estate Transactions in Virginia (Virginia CLE) (2019 Ed.)

1.23 TRUSTEES

1.2301 Counsel to Only One Party Serving as Trustee. Counsel for only one party (the lender, borrower, or seller) who (i) merely perfunctorily prepares a deed of trust and note in accordance with terms agreed between the lender and borrower without having authored the instrument and without furnishing any advice to any party on its terms and (ii) will not have any continuing attorney-client relationship with the client concerning the transaction at issue after settlement does not need to obtain the consent of any other party to serve as trustee on the deed of trust. However, counsel who has rendered advice or services influencing the substantive terms of the note or deed of trust or expects to have a continuing relationship with the client involving the transaction after settlement may

[Page 48]

not serve as trustee without full disclosure to and consent by both the nonclient party and the client. ²⁶²

1.2302 Attorney Loan Officer Serving as Trustee. An attorney serving as a loan officer for a lender may also serve as trustee on deeds of trusts securing loans by the lender. ²⁶³

1.2303 Counsel to Multiple Parties Serving as Trustee. Whenever representing multiple parties (the purchaser or purchaser-borrower, lender, or seller), the attorney must not also undertake to serve as trustee on the deed of trust unless the attorney first fully discloses to each client the potential conflicts and the disqualification rules upon default or foreclosure and each client then consents to the attorney's being designated trustee. ²⁶⁴

1.2304 Disqualification of Trustee. A trustee must resign rather than conduct a foreclosure when there is an objection by any party whose consent was necessary for him or her to have become trustee. ²⁶⁵

1.2305 Deed Preparation by...