A complaint was filed with the Middlesex County Ethics Committee charging respondent with conflicts of interest in connection with certain real estate transactions. After receipt of the Committee’s report the Court directed the Central Ethics Unit to file a petition for an Order to Show Cause, which issued in due course. That petition asserts that respondent’s conduct constituted violations of DR 5-105, DR 8-101, and DR 9-101, dealing respectively with conflicts, abuse of public position, and the appearance of impropriety.
I
The public position which respondent held during the times pertinent hereto was that of municipal attorney for the Borough of Carteret, to which he was appointed at the beginning of 1971. For some time prior to the events in question the Borough had implemented a policy of urban renewal pursuant to Federal Housing Authority (FHA) procedures. By ordinance it created the Carteret Redevelopment Agency (Agency), consisting of six members, five of' whom were appointed by the municipal governing body. The Agency’s function was to solicit proposals from developers for utilization of certain tracts for low and moderate income multi-family dwelling units. Gulya Brothers, Inc., a developer, submitted a proposal for a townhouse project on one of the tracts, which the Agency accepted. Thereafter, *4on April 5, 1971, Gnlya Bros. Redevelopment Corp. (Gulya) was established for the purpose of purchasing the land from the Agency and developing it, and marketing the townhouses which it erected thereon.
Upon acceptance of Gulya’s proposal the Agency was required .to obtain the necessary approvals from the municipal planning board, board of adjustment and governing body. Additionally, it was obliged to convey to the developer marketable title to the tracts involved. In due course the Agency, which was represented by its own counsel, successfully processed applications before the appropriate municipal bodies, and on November 15, 1971, the .Borough gave final approval to the project.
Thereafter Gulya’s attorney sought financing for the project on behalf of the developer but was unsuccessful. To aid in this endeavor the developer’s attorney sought out the respondent, who had “handled matters for him in the past”, was “familiar with mortgage financing”, and had done “some extensive real estate work.” In May or June of 1972 respondent, at the instance of Gulya’s attorney, discussed the project with the principals of Gulya and at that point took over the representation of the developer, with the full consent of previous counsel. Prior to this respondent had not represented Gulya in any capacity whatsoever. Specifically, he had not appeared on the developer’s behalf before the Agency; neither had he represented either the planning board or board of adjustment at the time of the Agency’s applications to those bodies or at any other time. Respondent was, however, attorney for the Borough when the Council acted favorably on the board of adjustment’s recommendation to grant the Agency’s application for the necessary variances for this project.
Respondent’s efforts on Gulya’s behalf produced the required financing through a NTew Jersey mortgage company. The financing consisted of both the construction mortgage and permanent mortgages available to the buyers of the townhouses. Respondent’s representation of the developer con*5tiuued throughout the initial construction stage oí the project, during -which time he was, as has been indicated, attorney for the municipality in which the development was located, albeit that representation of the municipality was not in any wise in connection with any business of or application on behalf of the developer.
Respondent also represented the mortgage company in sales involving permanent mortgages used in the purchase of townhouses from Gulya. In those same transactions he came to act as well on behalf of purchasers-mortgagors of the housing units at their closings of mortgage loan and title, under the following circumstances. In order to market the townhouses the developer engaged a real estate agent, whose function it was to attract buyers and assist those buyers in obtaining PHA approvals. It was the agent who led the buyers through whatever preliminary steps were required leading to execution of the contracts, and it was the agent who secured execution of those contracts. Respondent did not enter the picture until after the contracts had been signed by the buyer. The contract forms utilized by the agent, pursuant to these procedures, contained the following clauses:1
Purchaser shall be responsible for paying the closing attorneys for the mortgage (sic) their legal fee for examination of title and recording of deed and mortgage and shall also be responsible for and shall pay for survey, mortgage title insurance,- hazard insurance premium, escrow funds for taxes and insurance, appraisal and inspection fees and a one percent processing fee except as may be otherwise provided herein. * * *.
If purchaser uses seller’s attorney, the seller will pay the legal fee for title examination, recording of deed and mortgage, survey, mortgage title insurance, appraisal and inspection fees.
*6By virtue of the arrangement last referred to either respondent or an associate in his office attended closings not only for the seller in sixteen instances, but also for the purchasers-mortgagors in at least fourteen of those closings.2 At these closings purchasers were notified for the first time of the potential conflicts of interest arising out of respondent’s multiple representations. They were presented with and executed two separate waiver and consent forms, one acknowledging and approving respondent’s representation of purchaser and seller and the other acknowledging and approving his representation of mortgagor, mortgagee and seller.
As may be seen, then, there are two separate areas of potential conflict of interest called to our attention by the Committee report and the Central Ethics Unit’s presentment.3 The first centers about respondent’s representation of the builder-developer while at the same time serving as attorney for the Borough of Carteret. The second focuses on his representation at the closing of the seller, the purchasers-mortgagors and the mortgagee under circumstances casting doubt on the informed nature of the consents given by the buyers to this multiple representation.
II
We address first the asserted conflict presented by respondent’s representation of the developer while concurrently act*7ing as borough attorney. Respondent points out that at no time did his representation of Gulya involve any dealings or transactions with the Borough. All applications to municipal boards necessary to permit the Agency to convey clear title to the developer had been completed before respondent’s representation of the developer commenced. Throughout the course of negotiations with the Agency involving Borough-related matters, Gulya was represented by its own attorney who eventually called on respondent for assistance when financing loomed as an obstacle.
With all of this, however, the fact remains that respondent’s conduct was directly contrary to the mandate of this Court in In re A. and B., 44 N. J. 331 (1965). There it was noted that while in some situations it may be proper (within the proscription of DR 5-105) for an attorney to engage in dual representation, nevertheless
the subject of land development is one in which the likelihood of transactions with a municipality and the room for public misunderstanding are so great that a member of the bar should not represent a developer operating in a municipality in which the member of the bar is the municipal attorney or the holder of any other municipal office of apparent influence. We all know from practical experience that the very nature of the work of the developer involves a probability of some municipal action, such as zoning applications, land subdivisions, building permits, compliance with the building code, etc.
It is accordingly our view that such dual representation is for-hidden even though the attorney does not advise either the municipality or the private client with respeet to matters concerning them. The fact of such dual representation itself is contrary to the public interest. [44 N. J. at 334-35 (emphasis added).]
While in a sense this rule may be deemed somewhat harsh, particularly in a situation where, as here, the representation of both municipality and developer was at no time in connection with a transaction involving both clients, we are strongly of the view that the public interest demands strict adherence to the letter of In re A. and B., supra. A municipal attorney’s public obligations are such that he must *8take particular pains to avoid the shadow of suspicion which inevitably is cast when he begins to entangle himself in a representative capacity in the legal affairs of a developer operating within the municipality. If the municipal attorney is not a full-fledged member of the “municipal family,” he is least in such a close and confidential relationship with it as to warrant his not representing those who may benefit (or, as here, have already benefitted) from successful applications by others (here, the Agency) to the planning board and zoning board of adjustment.
In this ease the affirmative action of those municipal boards, while made at the Agency’s behest, inured to the benefit of Gulya. Those applications were, in a very real sense, in Gulya’s interest, were made at a time when respondent represented the Borough, and were then followed by respondent’s representation of Gulya in connection with the same development project. This representation ignored the clear admonition of In re A. and B., supra, and hence merits our disciplinary action.
Ill
We turn our attention to the conflict presented by respondent’s multiple representation of seller, purchaser-mortgagor, and mortgagee.4 At the outset we recognize the emphasis that our disciplinary rules place on the desirability of completely independent counsel. Specifically, DR 5-105 prohibits multiple representation except under certain se*9verely circumscribed circumstances.5 See In re A. and B., supra, 44 N. J. at 335 (Schettino, J., concurring). The 'sense of our rules is that an attorney owes complete and undivided loyalty to the client who has retained him. The attorney should be able to advise the client in such a way as to protect the client’s interests, utilizing his professional training, ability and judgment to the utmost. Consequently, if any conflicting interest could arise which would stand in the way of that kind of unstinting zeal, then the client must be so informed and the attorney may continue his limited representation only with the client’s informed consent.
In a real estate transaction, the positions of vendor and purchaser are inherently susceptible to conflict. In re Kamp, 40 N. J. 588, 595 (1963). This is likewise the case with a borrower-lender relationship. Id. at 596. The requirements of an attorney involved in such multiple repre*10sentations of purchaser, vendor and mortgagee are set out in Justice Proctor’s opinion in In re Kamp, supra, where he said:
Pull disclosure requires the attorney not only to inform the prospective client of the attorney’s relationship to the seller, but also to explain in detail the pitfalls that may arise in the course of the transaction which would make it desirable that the buyer have independent counsel. The full significance of the representation of conflicting interests should be disclosed to the client so that he may make an intelligent decision before giving his consent. If the attorney cannot properly represent the buyer in all aspects of the transaction because of his relationship to the seller, full disclosure requires that he inform the buyer of the limited scope of his intended representation of the buyer’s interest and point out the advantages of the buyer’s retaining independent counsel. A similar situation may occur, for example, when the buyer of real estate utilizes the services of the attorney who represents a party financing the transaction. To the. extent that both parties seek a marketable title, there would appear to be no conflict between their interest. Nevertheless, a possible conflict may arise concerning the terms of the financing, and therefore at the time of the retainer the attorney should make clear to the buyer the potential area of conflict. In addition, if the buyer’s interests are protected only to the extent that they coincide with those of the party financing the transaction, the attorney should explain the limited scope of this protection so that the buyer may act intelligently with full knowledge of the facts.
[40 N. J. at 595-96.]
See also N. J. Advisory Committee on Professional Ethics, Opinion 51, 87 N. J. L. J. 705 (1964).
In the application of these principles to the matter before ns we are mindful of the circumstances surrounding this type of transaction, namely, the purchase of low and moderate income dwellings with federally guaranteed financing, which serve to distinguish it from the conventional transfer of real estate. There is less flexibility in the terms. Federal auspices in this context brings with it a certain rigidity which leaves little room for negotiation of price and such other commonly negotiable features as limits and rates on borrowed money. The prescribed forms for bond and mortgage contain fixed terms from which variance is *11rarely, if ever, permitted. Nevertheless, the severely strietured nature of the relationship between mortgagor and mortgagee in no wise serves to diminish the essential obligation of full and timely disclosure. The opportunity for conflict to arise — for instance, in terms of a condition of title acceptable to one party but not the other ■ — • while perhaps remote is by no means non-existent. More apparent is the possibility that as between buyer and developer-seller there may ripen some disagreement respecting the physical condition of the premises. Without presuming to suggest an exhaustive list of potential areas of conflict, we draw attention to these as the kinds of matters of which consenting purchasers-mortgagors should be made aware before they consent to the attorney representing another party to the transaction.
Here the consent forms executed by purchasers at the eleventh hour amounted to little more than a perfunctory effort formally to comply with Kamp’s admonition. After the respondent was retained, he had an “immediate” duty to explain to the client the nature of his relationship with the seller and inform the client of the significance of any consent that the client may have given to dual representation. In re Kamp, supra, 40 N. J. at 596; see In re Lanza, 65 N. J. 347, 350-51 (1974).
The problems that can arise from the failure to heed that instructive warning are graphically demonstrated in the matter before us. The record reveals that a purchaser objected to signing one of the consent forms after the conflict of interest situation had been explained to him (because he believed it might place him in the position of approving a conflict which was “illegal”), but ultimately he executed the form as the result of persuasion from his wife and a desire to avoid the serious disruption of his moving plans resulting from any adjourned or cancelled closing. Although we agree with the Committee’s conclusion that the consent form was signed voluntarily in the literal sense that neither respondent nor the seller exerted any overt *12pressure on the client, nevertheless we are left with the impression, as was the Committee, that execution of the form was due more to the exigencies of the situation than to an unfettered will. And this need not and should not have been. The circumstances surrounding the execution of the consent form in this instance and in every other instance where the forms were executed in like fashion should not have been permitted to arise. The record before us reveals that respondent’s office dealt with the purchasers “for several weeks before * * * the closing.” Somewhere in that interval the time should have been taken and the opportunity created to explain to the purchasers the potential conflicts — - the “pitfalls” — so as to allow for execution of the consent forms after due deliberation.
While the practicalities of this type of purchase may generate joint representation of low or middle income purchasers-mortgagors and their sellers and mortgagees by a single attorney, those practicalities in no sense justify any relaxation of the requirement of full, complete and timely explanation of the pitfalls and implications of such representation and the potential for conflict. Indeed, given the increased likelihood that this class of clients may be without the resources to obtain separate representation, the need for meticulous observance of the requirement of full disclosure and informed consent is underscored.
IV
While tenable arguments have been made in favor of a complete bar to any dual representation of buyer and seller in a real estate transaction, see e. g., In re Lanza, supra, 65 N. J. at 353 (Pashman, J., concurring); In re Rockoff, 66 N. J. 394, 397 (1975) (Pashman, J., concurring), on balance we decline to adopt an inflexible per se rule. Confining ourselves to the type of situation before us (assuredly there are others, entirely unrelated to financial pressures), the stark economic realities are such that were an unyielding require*13ment of individual representation to be declared, many prospective purchasers in marginal financial circumstances would be left without representation. That being so, the legal profession must be frank to recognize any element of economic compulsion attendant upon a client’s consent to dual representation in a real estate purchase and to be circumspect in avoiding any penalization or victimization of those who, by force of these economic facts of life, give such consent.
This opinion should serve as notice that henceforth where dual representation is sought to be justified on the basis of the parties’ consents, this Court will not tolerate consents which are less than knowing, intelligent and voluntary. Consents must be obtained in such a way as to insure that the client has had adequate time —• manifestly not provided in the matter under consideration •— to reflect upon the choice, and must not be forced upon the client by the exigencies of the closing. This applies with equal force to the dual representation of mortgagor and mortgagee.
In view of respondent’s impeccable record, including a history of significant public service and contributions to the legal profession, we conclude that appropriate discipline is exercised by the imposition of this public reprimand.
These clauses have not been directly attacked in these proceedings and we do not pass on their propriety.
In a letter answer to the complaint, marked in evidence at the Committee’s hearing, respondent indicated that “one or two of the people did bring their own attorney to the closing.”
A third area emerges, although it was not touched upon in the complaint, testimony, report or presentment. It is the arrangement under which respondent represented both Gulya and the mortgage company with respect to the construction mortgage ■— again at a time when he was municipal attorney. Much of the thrust of this opinion can be directed with equal force to that relationship even though it has not been presented to us directly.
In an analogous context, the, not uncommon practice by some lending institutions of requiring real estate mortgagors to be represented by the lender’s attorney has not gone unnoticed by the Legislature. N. J. S. A. 46:10A-6 prohibits such a practice in a mortgage loan transaction where the mortgagee is a consumer. Senate Bill 35, an amendment to this statute which has passed the Senate and is now before the Assembly Banking and Insurance Committee, expands the scope of the statute to prohibit such a practice in all mortgage loan transactions, regardless of whether the mortgagee is a consumer or a commercial party.
DR5-105. Refusing to Accept or Continue Employment if the Interests of Another Client May Impair the Independent Professional Judgment of the Lawyer
(A) A lawyer shall decline proffered employment if the exercise of his independent professional judgment in behalf of a client will be or is likely to be adversely affected by the acceptance of the proffered employment, except to the extent permitted under DR 5-105 (C).
(B) A lawyer shall not continue multiple employment if the exercise of his independent professional judgment in behalf of a client will be or is likely to be adversely affected by his representation of another client, except to the extent permitted under DR 5-105 (C).
(C) In situations covered by DR 5-105 (A) and (B) except as prohibited by rule, opinion, directive or statute, a lawyer may represent multiple clients if he believes that he can adequately represent the interests of each and if each consents to the representation after full disclosure of the facts and of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each.
(D) If a lawyer is required to decline employment or to withdraw from employment under DR 5-105, no partner or associate of his or his firm may accept or continue such employment.