THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, July 24, 1996 TAG: 9607240007
SECTION: FRONT PAGE: A14 EDITION: FINAL
TYPE: Opinion
SOURCE: By MICHAEL W. SMITH
LENGTH: 73 lines
Should real-estate closings be conducted by lawyers only? Or should this field be open to others not trained in the law?
The Virginia State Bar, which regulates and defines the practice of law in the commonwealth under a specific delegation of authority from the General Assembly and the Virginia Supreme Court, began the process of answering these questions in a recent draft opinion issued by its Standing Committee on the Unauthorized Practice of Law. The committee, which is composed of seven lawyers and two laypersons, wrote an opinion stating that, in order for the public to be adequately protected, real-estate closings must be handled by a lawyer.
In the weeks since the draft opinion was issued, considerable confusion has been created by the bar and its role in the unauthorized practice of law process. The bar's sole interest in this matter is to adequately protect the public in real-estate transactions. I would like to set the record straight about the bar's responsibilities and process in preventing the unauthorized practice of law.
As with all areas in which nonlawyers seek to handle matters for clients, the question the bar and its Unauthorized Practice of Law Committee must always confront when its process is invoked is whether legal advice and decisions are involved to such an extent that the services of a person trained and licensed to practice law are required in order to provide reasonable assurance that sound advice and counsel will be given.
For most families, purchasing a home is their most-important single financial transaction. The closing of the purchase of a home is often fraught with anxiety for both the buyer and the seller. Often each has a family and a moving van loaded with their possessions awaiting the completion of the final paperwork. What if either party suddenly has a question? There may be numerous important questions, which deserve to be answered before the papers are signed.
What does it mean that there are two utility easements? What happens if the sellers do not move out on time? What local land-use regulations affect the property? What are the consequences of taking title in the way reflected on the deed, and what alternatives are available? What are the rights and responsibilities of the parties under the contract, deed of trust or deed of trust note?
The draft opinion of the bar's committee concludes that only a lawyer can answer these and other questions like them completely and effectively. Other interested parties, such as bankers, title-insurance companies and lay settlement agencies, disagree, citing the fact that nonlawyers have been closing real-estate transactions in Virginia for some time with few problems to the consumer.
The bar's process from this point is to receive comment and input on the draft opinion over the next several months from all people having an interest in the matter. The opinion is presently just a draft opinion of the Standing Committee on Unauthorized Practice of Law, and it is not enforceable by the bar against nonlawyers handling closings. It will become enforceable only if and when it is approved by the bar's council, its governing body and by the Virginia Supreme Court. That will not occur before the spring of 1997.
In the meantime, a joint subcommittee of the Virginia General Assembly is studying the matter, and it will be provided with a copy of the draft opinion as well. In the event that 1997 session of the Assembly sees fit to legislate in this area, such legislation will override any position of the bar that is conflicting.
Before the bar adopts a final version of this draft opinion, the public will be invited to submit written comment at least twice during the process, and we will ask the major newspapers throughout the commonwealth to publish our press releases concerning the draft opinion. Public comment in this process is important to the bar and is invited and encouraged as we seek to carry out our responsibilities to protect the public from the unauthorized practice of law in the real-estate field. MEMO: Michael Smith is the immediate past president of the Virginia
State Bar. He is a partner in the Richmond law firm of Christian &
Barton. by CNB