Ethics Opinions
Iowa Supreme Court Board of Professional Ethics and Conduct
Date of Opinion:
12/04/2002
Opinion Number:
02-06
Title:
PREPARATION OF REAL ESTATE DOCUMENTS FOR ENGINEERING FIRM
Opinion:
You are general counsel for a consulting engineering firm that designs public improvements for governmental agencies and utilities. These projects often require acquisition of land or easements across private property. Your firm has established a right-of-way group that contracts with the client to act as the client’s agent in the negotiation and purchase of the property or easement. You have asked whether, as counsel to the right-of-way group, you can prepare the related closing documents and any title clearing documents as an additional service to clients who request it.
Iowa Supreme Court Rule 37.5(2) provides:
“Except to the extent authorized by this rule, the selection, preparation, and completion of legal documents in connection with real estate transactions by non-lawyers constitutes the unauthorized practice of law unless the nonlawyer is acting on his or her own behalf as a buyer or seller.”
The exceptions mentioned in the rule deal with the preparation of legal documents incidental to residential real estate transactions of four units or less, and thus are not applicable here. Court Rule 37.5(2)(b) goes on to state:
“Nonlawyers shall not select, prepare or complete:
(1) Deeds;
(2) Real estate installment sales contracts;
(3) Affidavits of identity of nonidentity;
(4) Affidavits of payment of spousal or child support; or
(5) Any other documents necessary to correct title problems or deficiencies.”
Thus, the preparation of the real estate documents you describe does constitute the practice of law. The performance of such services by your employer, a consulting engineering firm, for third parties would constitute the unauthorized practice of law. See Formal Opinion 80-46. A corporation which is not authorized to practice law cannot do so simply by employing a licensed attorney to prepare the documents.
See, e.g.,
Nelson v. Smith
, 154 P.2d 634, 640 (Utah 1944);
State v. C.S. Dudley & Co.
, 102 S.W.2d 895, 900 (Mo. 1937). A similar question was recently resolved by the Ethics Committee of the North Dakota State Bar Association. That Committee was asked whether an attorney, as an employee of a title company which billed the buyers and sellers of a property, could review abstracts, prepare title opinions, and draft deeds and other title documents. In its Opinion No. 00-09, issued December 6, 2000, the Committee stated:
“The facts as presented by Attorney A appear to fall within the practice of law. Attorney A will be preparing documents and examining title in transactions in which the title company is not a party. Further, the work of Attorney A will be provided
at
charge
to the clients of the title company. Under existing North Dakota caselaw and persuasive authority from other jurisdictions, this would constitute the unauthorized practice of law by the title company. If Attorney A were to go into the employ of the title company as he describes, he would be assisting the title company in the performance of activity that constitutes the unauthorized practice of law.”
Thus, it is the Board’s opinion that the preparation of such documents by you would be aiding the unauthorized practice of law, contrary to DR 3-101(A).
You also state that your company’s right-of-way agents sometimes need to verify the status of the title to a parcel of land, and ask whether you would be able ethically to examine the abstract of title and render a title opinion for the use of such agents. Since this would amount to the performance of legal services for your employer, it would be a permissible task of in-house counsel. It should not, however, be marketed as a service to the firm’s clients.