Massachusetts Real Estate Closings Must Now be Conducted by Attorneys

Massachusetts Real Estate Closings Must Now be Conducted by Attorneys

An important ruling was handed down last week concerning the role of attorneys in Massachusetts real estate closings. The decision will have, not only an impact on the legal profession in The Commonwealth, but will also affect home buyers.

A dispute that began in 2006 between the Real Estate Bar Association and National Real Estate Information Services was settled by the Massachusetts Supreme Judicial Court.

The original argument stated that closing companies such as NREIS and their provision of services to mortgage lenders which included the practices of title examinations, drafting closing documents and disbursing settlement funds amounted to "the unauthorized practice of law." Via an article in The Boston Globe.

This case was originally ruled on in 2009 by a U S District Court judge who found in favor of the Pennsylvania based real estate services company. The local real estate bar was ordered to pay nearly $1 million in fees and court costs. However, last year a federal court overturned the ruling and sent questions to the Supreme Judicial Court. The main question was - whether or not real estate closings need to be performed only by licensed attorneys.

The Massachusetts Supreme Judicial Court made its decision last Monday requiring "substantive participation" of attorneys in all real estate transactions thereby limiting the amount of work that can be outsourced to out-of-state entities that have had an interest in taking over the main functions of local residential closings.

Why is this decision so critical to home buyers?

A home purchase is a significant investment and usually the largest one that an individual or family will make in their lifetime. Buyers need to have that investment protected and the presence of a qualified attorney can help to insure that this happens. During the closing process complicated forms need to be explained to the consumer and a "closing company" that is simply providing a notary or a witness of document signing does not provide any actual legal guidance.

This recent ruling applies to refinancing as well as residential home purchases and confirms the importance of having a qualified attorney oversee the entire process.

Copyright 2011 "Massachusetts Real Estate Closings Must Now be Conducted by Attorneys"

This post was written by

Claudette Millette, Broker, Owner, The Buyers' Counsel - (508) 881-6230

An Exclusive Buyer Brokerage serving the Greater Metrowest area

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