The Real Estate Bar Association for Massachusetts. REBA has filed two related actions to stop the illegal practice of notary or witness closings in Massachusetts, an illegal practice which threatens the Commonwealth’s protections for homebuyers and commercial property buyers.
At REBA’s Annual Meeting and Conference this week, REBA President Robert J. Moriarty, Jr., Esq. announced the two law suits as part of a series of ongoing actions the bar association is taking to protect Massachusetts homeowners and improve the professionalism of real estate transactions.
“The purchase of a home is the most important investment most families will ever make,” Moriarty said, “Home buyers and sellers, as well as lenders, rely on the training, professionalism, and integrity of attorneys to ensure that their property rights are protected.”
In 1935, the Supreme Judicial Court first held that the work of ensuring that legal title to property is valid, free from all encumbrances, and properly transferred from seller to buyer, requires legal judgment and can only be performed by those men and women trained in the law, licensed by the Commonwealth, and under the direct supervision of the Courts of the Commonwealth. Since then, the process of closing a purchase money mortgage loan has become much more complicated, requiring the parties to understand and execute dozens of dense legal forms.
Recently the Superior Court has twice affirmed REBA’s position that when the conveyance of the real estate interest is entrusted to a third person, who is not a party to the transaction, that third person must be an attorney.
Out-of-state closing companies are getting around the requirements of these decisions. In order to appear to comply with Massachusetts law, many engage attorneys to participate in the settlement of a residential real estate transaction while divesting them of virtually all responsibility for the conveyance. In these “witness only” closings, the attorneys do nothing more than witness the execution of the closing documents, acting not as attorneys but as notaries.
“The reason that only lawyers – who are those trained in the law – can give legal advice is to protect the public,” Moriarty said. “This requirement gives the buyer someone to hold accountable.” Unlike corporate closing agents, a licensed lawyer is personally subject to the strict ethical and financial oversight authority of the SJC’s Board of Bar Overseers and the Courts of the Commonwealth. These multiple levels of protection permit buyers, sellers and lenders to confidently and reliably close loans worth hundreds of thousands of dollars every day.
In his remarks at REBA’s Annual Meeting, Moriarty also noted that the typical attorney’s charges in connection with a closing have steadily fallen as a result of increased efficiency and competition. This is not a situation where there is one company that controls the market. There are thousands of attorneys throughout the Commonwealth who provide conveyancing and settlement services and the competition among them is keen. Their typical closing fees are similar or less than those charged by the closing companies.
For more information contact:
Robert J. Moriarty, Jr. Esq.
Marsh, Moriarty, Ontell & Golder
18 Tremont Street
Boston, Massachusetts 02108