AVOID “PRACTICING LAW”

California statute defines the unauthorized practice of law as: “Any person advertising or holding himself or herself out as practicing or entitled to practice law or otherwise practicing law who is not an active member of the State Bar, or otherwise authorized pursuant to statute or court rule to practice law in this state at the time of doing so, is guilty of a misdemeanor punishable by up to one year in a county jail or by a fine of up to one thousand dollars ($1,000), or by both that fine and imprisonment.” Cal. Business and Professions Code § 6126.

While California statute clearly defines the unauthorized practice of law as punishable by both fine and imprisonment, real estate brokers and agents prepare legal documents every time they prepare a purchase agreement, note and trust deed, land sales contract, lease, etc, forms which formally establish the rights and obligations of their clients. Thus, the line between what constitutes legal advice in the real estate profession is hard to pin down.

Most real estate brokers and agents are very familiar with this requirement and have no intention of over-stepping this boundary with their clients.  However, the economic decline has made it so that client’s real estate concerns are more complicated than ever.  Our office believes that agents and brokers are essential to the short sale process. Our goal is to assist and benefit agents, not take their place.

If you have a client that is having a difficult time deciding what is their best option with regard to their real estate, our office offers free one hour consultations.  At the consultation we will discuss the pros and cons of bankruptcy, short sale and foreclosure. We will also make sure that the client has a clear understanding of the credit and tax consequences of all their options.  Avoid practicing law without a license and assist your clients by connecting them with an attorney that can help.