News & Information: Orlando REALTOR® magazine - Special Feature

Across The Line

Monday, June 25, 2018  
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Orlando REALTOR® | JulyAugust 2018
 

It's a crime, but REALTORS® who cross the legal-advice line are at greater risk of financial liability and very angry clients than a jail cell.

By Lew Oliver
2018 Real Estate Legal Summit Class Instructor:
“Unlicensed Practice of Law and Language Drafting”


The unlicensed practice of law by Florida REALTORS® is a relatively common topic and source of threats, but it involves relatively few actual cases of criminal prosecution. To be sure, the unlicensed practice of law in Florida is in fact a crime, complete with possible jail time and fines and criminal record, but the far greater threat to REALTORS® who cross the line of legal advice is financial liability and very angry clients, not a jail cell or a criminal record.

Some REALTORS® may fear hypothetical roving bands of mad dog-attorneys hunting in the dark of night for unwary REALTORS® to sue or to file criminal complaints against, who may have accidentally offered minor legal opinions to their clients.

However, the reality is that very few lawyers go actively looking for REALTORS® who encroach into the sphere of legal advice. Most of us real estate attorneys are plenty busy enough without worrying about competition from REALTORS®. We have better things to do than harass REALTORS®!

Rather, the greatest danger to REALTORS® in the arena of unlicensed practice of law is from clients who may be damaged by taking poor advice; from brokers who may be angry at the potential legal exposure; from errors and omissions carriers who might refuse coverage if complaints are made; or from FREC if a client or other REALTOR® complains. Those threats are very real and are not uncommon. And if any of those disgruntled parties hire legal counsel, the REALTOR® may then also face scrutiny by an attorney.

Very few REALTORS® are careless (or bold) enough to offer elaborate legal opinions on legal disputes or purely legal matters, or to explain what a statute or a non-Florida REALTORS®/Florida Bar contract says. But it is relatively easy for REALTORS® to stray across the line on matters that might APPEAR to be within the scope of REALTOR® expertise.

The following are some examples of situations where I regularly see even very experienced and cautious REALTORS® cross the line:

  • Offering opinions about who is entitled to a deposit in a dispute;
  • Interpreting a loan commitment or loan approval document;
  • Attempting to explain a lender closing document;
  • Trying to explain FIRPTA withholding and Buyer FIRPTA Affidavits;
  • Trying to draft escrow agreements at closing;
  • Offering an opinion on tax treatments of profits;
  • Trying to explain the financing clause of the contract; and
  • Interpreting the meaning of Section 5 of the Florida REALTORS®/Florida Bar contract.


> Lew Oliver, Oliver Title Law, will be presenting “Unlicensed Practice of Law and Language Drafting” at the 2018 Real Estate Legal Summit. He can be reached at oliver@olivertitlelawcom.


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