SJC Rules: Attorneys Required for Massachusetts Real Estate Closings

Robert A. Finkel Robert A. Finkel

This week the Massachusetts Supreme Judicial Court came down with its long-awaited ruling in a case that has been termed “a major victory for Massachusetts homeowners” (Real Estate Bar Association (REBA) vs. National Real Estate Information Services (NREIS).

The court reaffirmed the important role that attorneys play in insuring the integrity and reliability of real estate transactions in Massachusetts and confirmed that an attorney must be involved in the process.

The court stated:

The closing is where all parties in a real property conveyancing transaction come together to transfer their interests, and where the legal documents prepared for the conveyance are executed, often including but not limited to the deed, the mortgage and the promissory note. The closing is thus a critical step in the transfer of title and the creation of significant legal and real property rights. Because this is so, we believe that a lawyer is a necessary participant at the closing to direct the proper transfer of title and consideration and to document the transaction, thereby protecting the private legal interests at stake as well as the public interest in the continued integrity and reliability of the real property recording and registration systems.

Companies such as NREIS employ robo-attorneys or notaries that frequently have no real knowledge of the transaction before them.  The court insisted that an attorney must be substantively involved in the closing or settlement of every Massachusetts real estate transaction and stated:

Implicit in what we have just stated is our belief that the closing attorney must play a meaningful role in connection with the conveyancing transaction that the closing is intended to finalize. If the attorney’s only function is to be present at the closing, to hand legal documents that the attorney may never have seen before to the parties for signature, and to witness the signatures, there would be little need for the attorney to be at the closing at all. We do not consider this to be an appropriate course to follow. Rather, precisely because important, substantive legal rights and interests are at issue in a closing, we consider a closing attorney’s professional and ethical responsibilities to require actions not only at the closing but before and after it as well.

When buying or selling real estate in Massachusetts, clients are best served by having a qualified, experienced attorney involved with the transaction from start to finish who can insure that title is marketable, that a valid deed is prepared and recorded, and that the consideration for the transaction is paid as the parties intended.  It is great to see Massachusetts’ highest court reaffirm this principal this week. 

For the full text of the decision, visit Real Estate Bar Association vs. National Real Estate Information Services. 

Note: The court left some matters undecided and future litigation is possible.  Please stay tuned here for future developments.