The Aspects of Rhode Island Residential Real Estate Transactions That Require a Licensed Attorney

A residential real estate transaction in Rhode Island is a complicated and delicate process that usually includes several professionals in addition to the buyer and seller. Purchases and sales of real estate also require the preparation and review of many documents, including an examination of a title for marketability, preparation of a deed, drafting a durable power of attorney, drafting a residency affidavit, and conducting a closing of the transaction, among other activities. The Rhode Island Supreme Court recently addressed the question of which of these duties must be performed by (or under the supervision of) a licensed attorney, and which, if any, can be performed by another type of real estate professional.

The recently decided case was brought to the Rhode Island Supreme Court by a unique procedure. Specifically, the case came about when a committee of the Rhode Island Bar Association requested the court to give its interpretation of a law pertaining to cases in which the committee was determining whether several parties should be charged with the unauthorized practice of law for fulfilling several duties in a real estate transaction without the supervision of a licensed attorney.

Before addressing the questions of whether each of the specific duties in question must be performed by a licensed attorney, the court made clear that all parts of a real estate transaction are best performed under the supervision of a licensed attorney. The court seemed to encourage both parties of a real estate transaction to employ a qualified Rhode Island real estate attorney throughout the process, although the Court ultimately answered the question of whether a non-attorney could perform some of the duties without committing the unauthorized practice of law slightly differently.

Regarding real estate closings, the court found that the tradition nationwide and in Rhode Island, of allowing title companies to perform a closing in conjunction with the issuance of title insurance, does not necessarily require a licensed attorney to be present or review the documents. In performing a title examination, however, the court found that the risks of a mistake were so high as to require a licensed attorney employed by the title company to conduct a title examination for the marketability of the property. The court further found that the drafting of a deed must be completed or closely reviewed by a licensed attorney. The court also ruled that the drafting of a residency affidavit and a limited durable power of attorney for purposes of a real estate closing can both be done by a nonprofessional associated with a title company.

The Importance of Legal Counsel in a Real Estate Transaction

Although the state supreme court found that non-lawyers can perform certain activities in a real estate transaction, the court’s position was clear that each party to a real estate transaction should employ an attorney throughout the process. In order to best protect a party from mistakes and their unexpected consequences, the counsel of a qualified Rhode Island real estate attorney is extremely valuable. The skilled Rhode Island real estate attorneys at Bilodeau Capalbo can help you throughout your real estate transaction. Schedule a free consultation at Bilodeau Capalbo today by contacting our offices at 401-300-4055.