Real Estate Agents Who Practice Law: Why It’s a Bad Thing

I just commented on a post on Rain City Guide by the prolific and highly-regarded blogger Ardell DellaLogia.  She raises an interesting issue regarding the interplay between an unsolicited cover letter enclosing an offer from a potential buyer and laws that prohibit discrimination.  As I note in my comment, the issue is worthy of some in-depth analysis.  But having just returned to the office from a one-week vacation — :-( — I simply don’t have the time for such research and thought. 

However, her post also wonderfully illustrates the fact that many agents routinely exceed their legal authority in regards to the practice of law.  In the seminal case of Cultum v. Heritage House, the Washington Supreme Court granted agents the authority to practice law but only to a very limited extent.  Specifically, agents can complete blanks in pre-printed forms that have been drafted and approved by attorneys.  That’s it, that’s the only service that an agent can provide that otherwise must be provided by a licensed attorney.  I have no doubt that an agent is not authorized to identify applicable laws or to counsel clients as to how to comply with them.

Do agents routinely cross the line into the unauthorized practice of law?  As reflected by Ardell’s post, and in my experience, I think the answer is pretty clearly “yes.”  There is admittedly an argument to be made that this limitation is bad for consumers, inconsistent with how the system routinely operates, and only serves to protect attorneys’ economic interests.  But without getting into that deeper issue, it’s apparent that agents routinely provide legal services for which they are neither trained nor authorized to provide.

Why is that bad?  At least two reasons.  First, it should be a concern anytime a professional exceeds the scope of his or her training and licensing.  Quite simply, the professional is not qualified to provide the service, and therefore the quality of the service must be suspect.  Second, and as I note in my comment, you can rest assured that the agent (or, more accurately, the attorney appointed by the agent’s insurance carrier) will disavow any obligation to provide this service.  In other words, there is a reasonable chance that you will rely on the advice given to your detriment without any recourse against the professional who provided the bad advice in the first place.

So beware the agent who provides legal advice.  If you want legal advice, you should hire a lawyer.  Does a buyer or seller benefit from having to access to legal advice?  Absolutely, as Ardell’s post suggests.  Just don’t rely on your agent to provide it.

On a completely unrelated note, have I mentioned that, when you hire WaLaw, you also hire Holmes Law Group, a law firm focused on residential real estate?  😉

Posted by Marc

Tags: ,

2 Responses to “Real Estate Agents Who Practice Law: Why It’s a Bad Thing”

  1. Tim Kane says:

    One of the problems is that consumers don’t know when the line “practice of law” is crossed and the other problem is agents are not going to necessarily tell them if the line is crossed (much of it due because the agents have been doing things the way they have for a long time; either knowingly not knowing).

    -S-Crow

  2. Craig says:

    Thanks for stopping by, Tim! I agree totally with your comment. And other than educating consumers I’m not sure about the solution. I think the odds of convincing agents to abide by this restriction are pretty close to zero. No client in the world wants to hear “I can’t answer that” from their agent, and agents are all about happy clients. And it is certainly an ingrained habit as you note.

    A more practical solution would likely be for the Supreme Court to expand a broker’s authority to engage in the practice of law, but that is a very slippery slope and I suspect also very, very unlikely. So we’re back to at least making sure consumers are aware of this dynamic.

Leave a Reply

=