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                                         131 N.J.L.J. 910
                                        July 20, 1992


Appointed by the New Jersey Supreme Court


Real Estate Closing Practices

    Since the Committee issued Opinion 26 on March 16, 1992, numerous public inquiries have been received asking whether the opinion prohibits a buyer or seller from representing himself or herself at closing, without an attorney, when buying or selling real estate or closing a mortgage. Although Opinion 26 is now before the New Jersey Supreme Court on petitions for review, due to the public importance of this issue, the Committee believes it to be in the public interest to publish the response to these issues which the Committee has already made public in its briefs filed with the New Jersey Supreme Court.
    In Opinion 26, and in its predecessor Opinion 11, the Committee does not purport to require buyers or sellers to retain attorneys in order to transfer title to real estate. The opinion simply presents buyers and sellers with a clear choice: either retain competent legal counsel, or select your own title insurer, and review the title commitment yourself, accepting the consequences of your choice to proceed to closing without legal advice or assistance with respect to the exceptions appearing therein. As the New Jersey Supreme Court has previously stated:
        Real estate title insurance policies, like other aspects of the transfer of real estate are unavoidably technical. That technicality counsels a prudent purchaser to consult qualified experts such as lawyers ...

If a buyer or seller does choose to appear at closing without an attorney, the title clerk cannot provide legal advice, draft legal instruments, interpret legal documents or otherwise purport to protect the legal interests of the unrepresented buyer or seller at the closing without engaging in the unauthorized practice of law.
    Further, the opinion does not prohibit attorneys from attending closings where one party is unrepresented. The Committee recognizes that, due to ethical constraints, a lawyer attending the closing to represent one party cannot undertake representation of both parties, absent prior full disclosure and the informed consent of all parties. However, any attorney present would have sufficient knowledge of the rules of ethics and the New Jersey Supreme Court's definition of the practice of law to deter title company personnel from engaging in unauthorized practices at closing. A lawyer who attends the closing, but cannot prevent unauthorized practices without jeopardizing the interests of the client, can and should report any unauthorized practice of law by a title company or real estate licensee to the Committee for its investigation and appropriate legal action.

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