Hire a Realtor, Get a Lawyer for Free!

I don’t know about you, but I’d say that anyone who regularly negotiates, drafts, and amends real estate contracts — as every Minnesota Realtor does routinely —  is practicing law (and I’m a former corporate attorney!).

And yet every state explicitly forbades the unauthorized practice of law, i.e., practicing law without a license.

So how is it that Realtors — at least in Minnesota — handle every aspect of a residential real estate transaction, with nary an attorney in sight?

Answer:  they have a statutory exemption to do so.

Here are the governing passages (if you love mind-numbing prose and detail):


Subdivision 1. Prohibitions.

It shall be unlawful for any person or association of persons, except members of the bar of Minnesota admitted and licensed to practice as attorneys at law, to appear as attorney or counselor at law in any action or proceeding in any court in this state to maintain, conduct, or defend the same, except personally as a party thereto in other than a representative capacity, or, by word, sign, letter, or advertisement, to hold out as competent or qualified to give legal advice or counsel, or to prepare legal documents, or as being engaged in advising or counseling in law or acting as attorney or counselor at law, or in furnishing to others the services of a lawyer or lawyers, or, for a fee or any consideration, to give legal advice or counsel, perform for or furnish to another legal services, or, for or without a fee or any consideration, to prepare, directly or through another, for another person, firm, or corporation, any will or testamentary disposition or instrument of trust serving purposes similar to those of a will, or, for a fee or any consideration, to prepare for another person, firm, or corporation, any other legal document, except as provided in subdivision 3.

And here is the statutory exemption:

Subd. 3a.Real estate closing services.

Nothing in this section shall be construed to prevent a real estate broker, a real estate salesperson, or a real estate closing agent, as defined in section 82.55, from drawing or assisting in drawing papers incident to the sale, trade, lease, or loan of property, or from charging for drawing or assisting in drawing them, except as hereafter provided by the Supreme Court.

So, there you have it:  hire a Minnesota Realtor, get a lawyer for free!

P.S.:  Ironically enough, the one time I encountered an attorney at a closing, it was for the purchase of my own house, and the attorney was representing my Seller.

About 20 minutes into the closing, the very befuddled attorney dropped the pretense that he knew what he was doing, and simply asked me how to fill in the proper forms.

I don’t know how much (if any) of his $1,000 fee he refunded to the Seller.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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