Almost every real estate attorney has had his or her legal advice contradicted by a presumptuous real estate agent. Typically, the lawyer sees a potential problem with some technical aspect of the closing (a tax issue, a boundary-line encroachment, a title problem, etc.) and informs the client of the need to fix the matter before the closing proceeds. This sends some real estate agents into a panic as they see their commission check put into jeopardy. In responds, the real estate agent may downplay the problem and give his or her uninformed legal advice which usually goes against what the lawyer said.
Such actions violate both Massachusetts’ statutory law prohibiting the unauthorized practice of law as well as the Massachusetts’ professional standards for real estate agents and the ethics code for REALTORS.
According to M.G.L. c. 221, section 46A,
No individual, other than a member, in good standing, of the bar of this commonwealth shall practice law, or, by word, sign, letter, advertisement or otherwise, hold himself out as authorized, entitled, competent, qualified or able to practice law.
In addition, Article 13 of the Code of Ethics and Standards of Practice of the National Association of REALTORS expressly prohibits its members from giving legal advice:
REALTORS® shall not engage in activities that constitute the
unauthorized practice of law and shall recommend that legal
counsel be obtained when the interest of any party to the
transaction requires it.
Lastly, 254 CMR 3.00, the Professional Standards of Practice for real estate brokers and salesmen in Massachusetts states that
a broker or salesperson shall only assume those duties and responsibilities for which he/she has adequate preparation and for which competency has been acquired and maintained.