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                                         94 N.J.L.J. 445
                                        May 27, 1971


Appointed by the New Jersey Supreme Court


Builder's Advertisement: "No Closing Costs"

    The issue covered by this opinion concerns advertisements by a builder that there will be "no closing costs" (or similar terminology) for the buyer, coupled with a course of action in connection with the sale of the property which discourages the presence of buyers' attorneys.
    Advertisements appear in newspapers and read, in part, "no closing costs" (or similar terminology). The builder has stated that such a phrase is used to assure the public that he is providing homes at a reasonable cost and that the price quoted is complete with no additional costs being imposed at settlement. He is careful to avoid saying "no closing fees." However, the layman may reasonably interpret this phrase as implying (1) he will not bear the legal costs incident to the closing, and (2) he does not need to secure the services of a lawyer, inasmuch as the builder will handle all those aspects of the transaction.
    Whether such advertisement of "no closing costs" (or similar terminology) standing alone does constitute the unauthorized practice of law, we need not decide at this time. We hold that such an advertisement does constitute the unauthorized with the following course of action:

    A. The builder presents the contract on a "take it leave it" basis which seriously limits the value of an attorney's presence. The sales contract is essentially non-negotiable.
    B. The preparation of all legal documents is by lay personnel without direct supervision by an attorney.
    We are of the opinion that advertisements of "no closing costs" (or similar terminology) are intended to deter and in fact would deter the buyers from seeking the independent advice of an attorney and do encourage the buyer to rely upon the seller for legal services which would be provided by lay personnel. We believe that while no direct cost is attributed to this service it is in fact reflected as part of a package deal and included in the entire cost of the home. N.J. State Bar Ass'n v. Northern N.J. Mortgage Associates, 32 N.J. 430, 443 (1960).

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