Formal Opinion 119
(1963)
Real Estate Transaction

The following inquiry has been referred to the Committee:

"We would appreciate your opinion as to the duty of an attorney whose client asks advice regarding a real estate transaction which is being closed in the office of an escrow company, title insurance company or real estate broker. The client is a buyer or seller and has already signed an earnest money agreement, without first asking your advice, committing him to close the sale in the office of’ say, the X Escrow Company. An employee of the company, not an independent attorney, has prepared a contract deed or mortgage, and the client has been asked to sign. He wants to know whether ‘everything is all right.’"

"Assuming that the escrow company has illegally engaged in the practice of law in preparing the documents, can you, as an attorney, help your client, or should you wash your hands of the whole matter advising him that you cannot be a party to an illegal transaction?

"If the foregoing is not your duty, can you ethically advise your client regarding the legal effect of the documents which he has been asked to sign?

"Suppose that you discover an error in one of the documents. May you then discuss it with the non-lawyer employee of the escrow company who is responsible?

"To put the matter broadly, to what extent and in what ways may a lawyer deal with an unlicensed person who is illegally practicing law, or with the product of his illegal practice?"

It is the opinion of the Committee that the question should be answered as follows:

1. That the attorney in the performance of his duty may approve or disapprove any document submitted to him by his client regardless of who may have drafted the document.

2. That it is not the duty of an attorney to wash his hands of the matter and that approval or disapproval of the instruments does not make the attorney a party to an illegal transaction.

3. That an attorney may discuss errors in a document submitted to him for examination with anyone involved, attorney or non-attorney.

4. That it is the duty of an attorney to cooperate with the Committee on Unauthorized Practice of Law and not to be a party to such unauthorized practice; this however does not require the attorney to abstain from advising his client or limit him in the exercise thereof.