Preparation of real property conveyance documents is the practice of law. This is for the protection of the public from the potentially severe economic and emotional consequences that may flow from erroneous advice given by persons untrained in the law.
Appellant commercial title company assisted homeowners in purchasing residential real estate. The state brought an action alleging appellant had engaged in the unauthorized practice of law by handling most aspects of the real estate transaction. The trial court found that appellant engaged in the unauthorized practice of law and enjoined it from performing future acts deemed to constitute the practice of law. The appellate court affirmed in part and reversed in part the trial court’s declaration.
Did the trial court err in holding that appellant commercial title company was not allowed to prepare deeds, notes and other instruments related to mortgage loans and transfers of real property because it constituted a practice of law?
Conclusion 1: The preparation of instruments by appellant commercial title company, even with preprinted forms, involved more than a mere scrivener's duties. By necessity, appellant passed upon the legal sufficiency of the instruments to accomplish the contractual agreement of the parties. Also, the retention of attorneys by appellant to review the closing documents did not save its activities from constituting the unauthorized practice of law. The adverse interests in real estate transactions made it extremely difficult for the attorney to maintain a proper professional posture toward each party.
Conclusion 2: The examination of titles required expert legal knowledge and skill. Thus, appellant commercial title company could conduct title examinations and prepare abstracts only for the benefit of attorneys.
Conclusion 3: In practice, there was no way of assuring that lay persons conducting a closing would adhere to the restrictions. Real estate and mortgage loan closings should be conducted only under the supervision of attorneys.
Conclusion 4: Instructions to the Clerk of Court or Register of Mesne Conveyances as to the manner of recording, if given by a lay person for the benefit of another, should be given under the supervision of an attorney.