It has been a red-hot residential real estate market all over Massachusetts. Homes in good locations that are updated and priced fairly are going under contract quickly. The weather may be turning colder as we head into 2017 but the sale prices of good housing throughout the North Shore, including Lynnfield, Saugus, Danvers, Lynn and Wakefield have stayed firm. As New Englanders know, after a snow-filled winter, a warm spring is always welcome. Traditionally the housing market heats up once the snow begins to melt. However, with the small inventory of available homes today, potential buyers may wish to keep close watch on new listings during the winter too. If 2017 is the year you will buy your house, be mindful that there are many complications involved with purchasing a home, from start to closing. An experienced and knowledgeable real estate attorney to represent your interests only, throughout the process, can be valuable. Actually, is a lawyer required for closing?
Massachusetts is one of the few states in the country that is considered an “attorney state” for residential real estate transactions. That means that home buyers and sellers in Massachusetts typically have an attorney represent them (unlike other states where most matters are handled by a real estate agent and a title company). An attorney’s involvement is required by G.L. c. 221, s. 46A, which prohibits the unauthorized practice of law by non-lawyers.
The MA Real Estate bar Association (REBA) takes the position that real estate closings conducted by non-attorneys, often called “witness-only closings” or “notary closings”, are not in the best interest of the consumer or buyer. “Decisions made by home buyers and other mortgage borrowers are particularly susceptible of improper influence, and even predatory behavior, by individuals who are unqualified to give legal advice.” REBA strongly recommends that the Buyer and Seller each have their own attorney in addition to the attorney conducting the closing, to prevent an issue of conflict and to assure that each side is adequately represented.
Other states allow closings to be conducted by a notary public who may or may not also be a lawyer. This remains prohibited in Massachusetts and what the notary may and may not do were discussed recently in REBA News after a new bill was signed by Governor Baker regulating notaries public to protect consumers and the validity and effectiveness of recorded instruments. Chapter 289 of the Acts of 2016 sets forth that a “non-attorney notary may notarize documents but may not conduct a real estate closing”. The statute also details obligations and standards of conduct for notaries, including:
- Prohibition of a non-attorney notary engaging in the practice of law includes any representation in advertising that the notary has specialized legal knowledge, with particular reference to giving advice on matters related to immigration status. The prohibition shall not preclude a “non-notary who is duly qualified, trained or experienced in a particular industry or professional field from selecting, drafting, completing, or advising on a document or certificate related to a matter within that industry or field,” nor shall it preclude a notary employed by an attorney or lender from notarizing documents in conjunction with real estate loan closings property conducted by the employer. [L. c. 112 s. 222(a)12, 22, 24]
Notaries within the Commonwealth of Massachusetts have a duty to act within set statutory standards and guidelines. Non-attorney notaries may not act or represent themselves in a way which may be construed as offering legal advice or acting as an attorney. This can be critically important in connection with real estate closings because the interests of the buyer, seller and bank may diverge and each may need legal advice from an attorney who is unbiased and representing only one party.
The cost of hiring your own counsel will add to the closing costs but it may well save significant money in the long run if problems or complications arise.