ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, October 18, 1996 TAG: 9610180067
SECTION: VIRGINIA PAGE: A-1 EDITION: NEW RIVER VALLEY
SOURCE: MAG POFF STAFF WRITER
MEMO: NOTE: Shorter version ran in Metro edition.
By a vote of 50-12, the Virginia State Bar Council voted Thursday to recommend that the Virginia Supreme Court limit overseeing real estate closings to lawyers.
But R. Brian Ball, a Richmond lawyer who represents the Coalition for Choice in Real Estate Closings, said opponents of the rule will continue their fight by filing briefs with the high court.
He said his group, which includes bankers, title companies, real estate agents, builders and mortgage companies, also will ask the General Assembly to nullify the action. A legislative committee has scheduled a hearing on the issue Oct. 31 in Richmond.
Steve Haner of the Virginia Real Estate Attorneys League said a long road lies ahead before Thursday's recommendation becomes law. Recommendations by the bar council generally are accepted by the state's high court, but most are not controversial.
If it should be adopted by the Virginia Supreme Court, a lawyer would have to be available to answer questions at all closings of real estate transactions, including the thousands of home sales annually across the state.
The rule, as revised Oct. 2, would not require the lawyer's physical presence at the closing, however.
The recommendation would overturn a rule adopted in 1981 that allows lay or non-lawyer agencies, such as title companies, to handle closings. Such lay agencies now close the majority of deals in Northern Virginia, but lawyers still dominate the practice in the Roanoke Valley. Lawyers Title Insurance Co., however, is in the business here.
Members of the council, which met at Hotel Roanoke, had to disclose the extent of their real estate practice and certify that they could vote impartially.
Members who supported adoption of the lawyer-only rule generally cited two reasons: They said closing a real estate transfer constitutes legal practice and a lawyer should be present to protect the public; and lawyers have ethical and fiduciary rules that lay agencies lack.
Warren S. Neiley Jr. of Blacksburg said council members had been lobbied intensely by banks and real estate agents.
D. Stan Barnhill, a Roanoke lawyer, said the answer to the problem "is simple and crystal-clear." He said he was convinced that closing a deal is the practice of law, and if the General Assembly has a different concept, it should reverse the action.
Thomas E. Glascock of Hampton urged other council members not to fear public and media reaction. He said the opinion should be considered by the high court, and "then let the General Assembly act."
Richard Atlee of Newport News said he no longer practices real estate law. But when he did, he said, he was called on constantly to give legal opinions.
William T. Wilson of Covington said protecting the public ``always justifies monopoly." He said the council would be running against the tide of public opinion, "but I don't think that should control our duty to regulate ourselves."
Several speakers said lay settlement agencies are not regulated, but Ball said after the meeting that his group favors adoption of regulations.
Speaking in opposition, J. Jay Corson IV of McLean said the day of exclusive practice is over and never will return. The bar council, he said, was "swimming upstream while the flood is coming downstream."
The public doesn't want protection, Corson said. "The public wants cheap." Although legal fees may add several hundred dollars to closing costs, the state real estate attorneys' league contends it not more expensive than lay settlements.
Corson also warned that the rule would look like a "lawyer protection act" and do more harm than good to the profession.
The rule also was opposed by the Department of Justice, the Federal Trade Commission, Attorney General Jim Gilmore and Michael Rigsby, counsel to the Virginia State Bar.
LENGTH: Medium: 75 linesby CNB