THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, October 18, 1996 TAG: 9610180511
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MAG POFF, LANDMARK NEWS SERVICE
DATELINE: ROANOKE LENGTH: 82 lines
ACCEPTS RECOMMENDATIONS FROM THE COUNCIL.
By a margin of 50 to 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, will also ask the Virginia General Assembly to nullify the action. A legislative committee has scheduled a hearing on the issue Oct. 31 in Richmond.
Steve Haner, who represents the Virginia Real Estate Attorneys League, said that a long road lies ahead before Thursday's recommendation becomes law.
If it should be adopted by the Virginia Supreme Court, however, a lawyer would have to be available to answer questions at all closings of real estate transactions, such as thousands of home sales annually across the state. Recommendations from the bar council generally are accepted by the state's high court.
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, while lawyers still dominate the practice in the Roanoke Valley. Lawyers Title Insurance Co. is in the business in Portsmouth.
Members of the council, which met at the 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 that closing of a real estate transfer constitutes the practice of law and that a lawyer should be present to protect the public. They said 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. He said doctors, accountants and other professions have monopolies in their fields because they are most equipped to work in their areas. He said a title cannot be closed without practicing law.
D. Stan Barnhill, a Roanoke lawyer, said the answer to the problem ``is simple and crystal-clear.'' Barnhill said he was convinced that closing a deal is the practice of law. If the General Assembly has a different concept, he said, the legislators 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 so, Atlee said, he was constantly called on to give legal opinions.
William T. Wilson of Covington said, ``The protection of 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 later that his group favors adoption of regulations.
Speaking for the other side, 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."
He also warned that the rule would look like ``the lawyer protection act'' and do more harm than good to the professions.
Before taking a vote, the council held a public hearing at which both sides presented arguments for and against the rule. The rule was also opposed by the Department of Justice, the Federal Trade Commission, Attorney General James Gilmore and Michael Rigsby, counsel to the Virginia State Bar.
KEYWORDS: REAL ESTATE CLOSINGS VIRGINIA STATE BAR VIRGINIA
STATE SUPREME COURT RULING by CNB