Courts Recognize Importance of Lawyer Involvement in Real Estate Transactions; Massachusetts Attorneys Required in Closings

The landmark decision reached by the U.S. Court of Appeals for the First Circuit, in Real Estate Bar Association (REBA) v. National Estate Information Services (NREIS), 459 Mass. 512 (2011), affirmed not only the mandatory presence of but the substantial participation and involvement of a Massachusetts attorney in real estate closing proceedings.

The issue in the case was the legality of the NREIS’s actions related to providing so-called “drive by closing attorneys” and all the necessary required documents as part of its services. NREIS provided nationwide services for closings, and it had a list of contract attorneys who would arrive at closing proceedings to provide limited services and in order to meet the attendance requirement under Massachusetts law.

The justices in the case cited a lack of information necessary to determine whether the NREIS was engaged in the unauthorized practice of law, but they reaffirmed that the conveyance of real property and the various corollary documents associated with the transfer did amount to the practice of law, and therefore the situation required more than the mere presence of an attorney.

Massachusetts law requires that attorneys oversee the closing process, and that they are an integral part of the actual closing process itself. The aspects of closing that amount to the practice of law, as found by the court, include:

  • Close reviewing of the title report in order to verify the seller has good, clear, and marketable title to the property;
  • Drafting the deed itself;
  • Recording of the deed and the mortgage; and
  • Paying off any prior mortgages or liens, as necessary, to ensure proper distribution of funds.

As the court directly stated, “the closing attorney must play a meaningful role in connection with the conveyancing transaction that the closing is intended to finalize.” Mere presence, including handing off of documents and collecting signatures, is not enough “precisely because important, substantive legal rights and interests are at issue in a closing, we consider a closing attorney’s professional and ethical responsibilities to require actions not only at the closing but before and after it as well.” [emphasis added].

Being represented by an experienced Massachusetts real estate lawyer is not only required during the course of a closing,but  it’s also generally a good idea. Attorneys owe their clients certain fiduciary duties to ensure that they are being zealously represented, which is an advantage during any stage of a real estate transaction. This includes but is not limited to discovering encumbrances or defects, helping to secure financing, close examination of the opposing party’s documents, negotiating on your behalf, and perhaps most importantly, explaining the process every step of the way.

The property transactions attorneys at Pulgini & Norton offer meticulous advice in closing home purchases and refinancing near Boston. Our attorneys can advise you regarding every phase of the process, identifying and addressing in advance any potential obstacles that could affect your goals. We serve clients in Somerville, Cambridge, and Malden, among other communities. You can reach us by calling  (781) 843-2200, or by contacting us online in order to schedule an initial consultation.

More Blog Posts:
Massachusetts Mortgage Laws and Avoiding Foreclosure, Massachusetts Real Estate Lawyer Blog, published January 13, 2015

The Duty to Disclose Defects, or Lack Thereof, in Massachusetts Real Estate Transactions, Massachusetts Real Estate Lawyer Blog, published January 6, 2015

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