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Posted by: Barry Kolar on Feb 7, 2012

Prepared for the TBA Special Committee on UPL Enforcement

January 2006


The Special Subcommittee on Real Estate was created in September 2005 under the direction of Chairman, Harry Ogden, of the TBA Special Committee on UPL Enforcement. This Subcommittee was requested to consider how UPL enforcement could be improved to better protect Tennessee consumers and Tennessee lawyers from the unauthorized practice of real estate law. The current members of this Subcommittee are: James T. DuBois, Chair; Bill Bovender; Ed Townsend; and Courtney Hollins. The Subcommittee is assisted by Becky Rhodes and has met twice via conference call since its creation.

These meetings have resulted in the following Report. In examining the issues which are special to the practice of real estate law, we sought to determine how our recommendations fit into the Mission of the Committee. We examined three areas: the ethical duties of lawyers in Tennessee regarding UPL; the possible betterment of the process for UPL enforcement; and the education of the Tennessee consumers and lawyers as to avenues available for readdressing wrongs caused by UPL.


In recent years, there has been a substantial increase in the number of title and closing companies in Tennessee. This has been especially true in Spring Hill, Tennessee because the Saturn Plant was located near the Maury and Williamson County line. This resulted in a tremendous influx of families to this area in the 1990’s. Spring Hill is partly in Maury County and partly in Williamson County and is recognized as one of the fastest growing areas in the nation. Along with this growth has been a substantial increase of new residents. This is expected to continue for many years to come because of the recent announcement by Nissan to relocate its national headquarters to Southern Williamson County, near Spring Hill.

Although the services of these title and closing companies (title examinations, title insurance policies and closings) are not in themselves the practice of law, such activities are all law-related services. A part of every real estate transaction involves the practice of law. Rendering title opinion letters, and preparing deeds, notes, deeds of trust, escrow agreements, hold harmless agreements, etc. are just a few of the numerous documents involved in most real estate transactions. While in the past, most of the title examinations and issuance of title insurance policies were handled by lawyers in Tennessee, the trend has been in the other direction over the last few years. Most of the new companies formed in recent years are owned and operated by non-attorneys. While in the past, lawyers were responsible for seeing that all documentation in the real estate transaction was handled properly, non-lawyers are now beginning to provide those services, and charging the consumer for the preparation of legal documents and giving legal advice.

In May, the Committee was furnished numerous examples of legal documents that were recorded in the Register’s Office of Maury County Tennessee. This practice continues, and copies of additional documents have been forwarded to the Attorney General’s Office. During a six (6) month period, from May – October, 2005, individuals and/or title and closing companies (not attorneys), prepared four hundred and fifty-seven (457) deeds and fifty-two (52) deeds of trust in Maury County alone.

Courtney Hollins, a Member of this Subcommittee, as well as a Member of the Nashville Bar Association, has been doing some additional research regarding this issue. There is also concern regarding narrowing the focus of this Report to rural bar issues. After speaking with people across the state of Tennessee, this is simply not an issue that should be centralized in Maury and Williamson Counties. In fact, there are different practices in different divisions of the state.

There is a plethora of non-attorney closing companies operating in Davidson County and also in surrounding counties. In addition there are banks and commercial, residential and mortgage brokers, who are preparing contracts, doing all sorts of due diligence review, and rendering legal advice in connection with sales and purchases, who are compromising the rights of clients.

Because of the widespread and blatant violations of the UPL Statutes, this Subcommittee believes it is extremely important for this matter to be addressed by the appropriate entity or governmental agency in the very near future. The harm to the consumers may not be seen immediately as a lot of the errors in real estate documents are not discovered until someone sells their home, refinances or obtains a second deed of trust on their home.

I. Ethical Duties Of Tennessee Attorneys To Assist In Enforcement Of UPL Statutes.

Rule 5.5 of the Tennessee Rules of Professional Conduct discuss the duties of lawyers on the issue of the Unauthorized Practice of Law (UPL). Rule 5.5(b) provides that a lawyer shall not assist another in activities that constitute UPL. Comment 1 emphasizes the importance of lawyers protecting the public against UPL. This protects consumers against improper advice and documentation that may cause substantial adverse consequences.

Therefore, the Subcommittee is of the opinion that lawyers in Tennessee have an ethical obligation to report such a widespread and flagrant violation of the UPL Statutes. It is believed that substantially all of the attorneys would fulfill this responsibility if they were better educated of the activities being practiced and what they can do to help the UPL enforcement.

II. Possible Betterment Of The Process for UPL Enforcement.

The June 2005 Interim Report of the Committee reviewed recent UPL enforcement, particularly in regards to the role of the TBA, other bar associations, the Attorney General’s Office and the District Attorney’s Offices. Our Subcommittee strongly believes that better enforcement can be realized by involving all Tennessee attorneys in this process (because of our ethical duties), and better educating them. It is also believed that our TBA can better assist Tennessee attorneys and consumers, especially in the rural areas, in enforcing the UPL laws in the real estate practice area.

Several years ago, the TBA had a Special Committee on UPL enforcement. Attorneys across Tennessee could send matters to the TBA which would then be referred to this Committee for review and action. The chair of this Subcommittee previously served on this TBA Committee. The majority of activities (which were contrary to the UPL Statutes) were handled successfully by this Committee. After investigation, a letter was normally sent to the person allegedly involved in such activity, which usually resulted in the activity ceasing immediately. Our Subcommittee believes that a similar process should again be considered by our association, at least on an interim basis.

It is recognized that the Attorney General’s Office, the District Attorneys’ Offices and the bar associations in some metropolitan areas are actively engaged in enforcing UPL laws. It is the understanding of the Subcommittee, that Hamilton and Knox Counties are utilizing some of the best procedures for UPL enforcement; Shelby County is also substantially active in following procedures as well. It is also known that a substantial need for assistance in enforcement in non-metropolitan areas and smaller bar associations throughout Tennessee.

The accumulation and analysis of UPL enforcement procedures in the metropolitan areas by our Committee is a big step. Hopefully, we can write general guidelines for use by smaller bar associations. It was noted that some of the smaller communities in Tennessee do not have a separate bar association and others have a multi-county bar association. It is believed that general guidelines will be of substantial assistance to these areas. Therefore, our Subcommittee strongly endorses the activities of the Committee in this regard and believes this will assist the lawyers in non-metropolitan areas to better assume a major responsibility for the future as is currently being done in the metropolitan areas.

In the interim, our Subcommittee believes that it is a very important role of our association to limit the practice of law to lawyers in Tennessee. Keeping non-lawyers from practicing law is a part of the responsibility of our association. Accordingly, the Subcommittee believes, on an interim basis, the association should further study and adopt general guideline for possible use by smaller bar associations and area bar associations is Tennessee. Once these rules and procedures are adopted for recommendation, it is hoped and believed that the attorneys in these areas will become very active in assisting the other entities named above in preventing UPL activities. After a reasonably short period, it is believed that the rural areas will then substantially assume this responsibility.

Therefore, the Subcommittee urges the Committee to encourage the TBA to reestablish a stronger role of the TBA in the enforcement of the UPL laws, especially on an interim basis, with the goal being to eventually work its way out of having the primary responsibility. Lawyers and bar associations would become more knowledgeable in what can be done, what should be done, and what procedures to follow for assisting the public agencies and protecting the general public from flawed advice and documentation of non-attorneys.

III. Means Of Educating Attorneys And Consumers On UPL Laws And Enforcement In The Practice Of Real Estate Law.

The Subcommittee has reviewed various real estate related documents prepared by non-attorneys and has concluded that the problem is mainly related to non-attorney owned title and closing companies in non-metropolitan areas. Although no separate study has been conducted, it is believed that the bar associations in metropolitan areas are probably enforcing this area of the UPL laws in a reasonably good manner. However, it was noted that very few, if any, of the bar associations in the non-metropolitan areas have a formal procedure for the enforcement of the UPL laws. Therefore, an important function of the TBA can be to educate attorneys in non-metropolitan areas regarding practices and procedures in enforcing UPL laws and a recommended set of guidelines for these areas. The analysis currently being conducted by the Committee on UPL enforcement by metropolitan bar associations can be utilized in fulfilling a substantial portion of this educational process.

Secondly, once the bar associations of the non-metropolitan areas are educated and begin to assume the responsibility of assisting in the enforcement of the UPL laws, the lawyers can be better educated on the problem in this particular area and of suggested guidelines of our association in handling these concerns. Bill Bovender, a member of our Subcommittee, has agreed to prepare and submit an article for review, in hopes that it will be included in the TBA Journal sometime in 2006. In this way, the bar associations, and those lawyers who are members of those associations, will be better prepared to assist in the enforcement of UPL laws in the real estate areas. A substantial number of consumers in Tennessee purchase a new home or refinance their existing home every few years. It is felt that the advice and documentation related to these transactions by lawyers will much better protect the consumer. The purchase of a home is usually the largest single investment by families in Tennessee.

Simultaneously with educating the bar associations and lawyers, the Subcommittee believes that our associations can be of substantial assistance in educating consumers in the UPL real estate area. More and more consumers are beginning to obtain information through websites on the internet. It is recommended that we establish a special link to the consumer through the TBA website for obtaining information on the unauthorized practice of law and what the consumer can do if harmed by someone violating these laws. It was also recommended that the staff of the TBA could be a vital link to this effort by obtaining information on what websites are available for dissemination of this information.

The Subcommittee is of the opinion that this problem could be substantially decreased in a timely manner with a letter from the appropriate entity. Whether it be from the Attorney General’s Office, the District Attorney’s Offices or the TBA itself, it needs to be discussed and a decision made at the January meeting of the Committee.