What? Mail-away closings are unethical?

Yes. It is unethical for a Georgia attorney to conduct a mail-away closing.

Really?

Yes, really.

Really, really?

Yes, really really.

But how can that be true?

Look, don’t take our word for it. Here’s the Georgia Supreme Court opinion. Read it yourself. For real, read it. Or just read the summary. It’s only one paragraph. It’s not even a long paragraph. You can do it. We’ll wait.

OK, done? Great! So here’s the thing: The Georgia Court was asked if it was ethically proper for a lawyer to hand off document execution to a non-lawyer while being available to answer questions during the “closing” by telephone. Know what the Georgia Supreme court said? Well, of course you do, since you read the opinion yourself, right? But just in case you didn’t, here’s the gist: The Supreme Court said that it, in fact, was not ethically appropriate for an attorney only to be available by telephone. The Supreme Court said that the attorney had to be physically present at closing. It’s right there.

Is this a new thing? How long has it been that way?

The Georgia Supreme Court issued its order February 11, 2000. It’s been like this for over twenty years. Twenty. Years. Twenty.

So if a Georgia lawyer’s physical presence at a closing is required at closing, what counts as a closing?

While the Supreme Court has not explicitly enumerated what all of those events are, they did say that closings include, but are not limited to: (i) rendering an opinion as to title and the resolution of any defects in marketable title; (ii) preparation of deeds of conveyance, including warranty deeds, quitclaim deeds, deeds to secure debt, and mortgage deeds; (iii) overseeing and participating in the execution of instruments conveying title; (iv) supervising the recordation of documents conveying title; and (v) in those situations where the Lawyer receives funds, depositing and disbursing those funds in accordance with Rule 1.15(II).

That’s from Formal Advisory Opinion 13-1. Of course, if you want, you can also just read the opinion yourself.

It’s the preparation and execution of the documents conveying title that’s the issue. Warranty deed? Limited warranty deed? Quitclaim deed? Georgia lawyer has to be present when it’s signed. Deed to secure debt? Same thing. Georgia lawyer has to be there.

I still don’t believe you.

FFS. Read the opinions, all right?

But we do them all the time.

For sure. You know what, though? People drive above the speed limit all the time, too. Does that make it all right? If you get pulled over by the cops, will you get off with a warning when you say “oh, but I go this speed all the time, so it must be OK!” Or will the cops just write you a ticket? We’re gonna guess you’ll end up with that ticket, yeah?

You know what people also do all time? Shoplift. Cheat on their taxes. Fail to come to a complete stop at a stop sign. Jaywalk. They get away with it too. Remember, just because someone gets away with something does not mean it’s OK.

What about investor closings?

Go ahead and read those opinions again. Do you see any distinction made for investors? No, you don’t. Know why? Because there isn’t one. A Georgia lawyer must be physically present at closing even if there’s an investor involved.

But other law firms do them all the time!

Yeah. Other lawyers will conduct mail-away closings. It happens all the time. We know it. But how? How can that be? Well, there are really only two possible reasons why a Georgia lawyer would agree to do mail-aways. They are:

1. They don’t know they’re wrong. Here’s a hard truth. Most lawyers really don’t keep up with legal ethics, OK? If you ask a lot of closing attorneys how Formal Advisory Opinion 00-3 affects their practice, you’ll get a lot of blank stares. Then ask if they’ve actually read Formal Advisory Opinion 00-3. How do you think that’ll go over? When it’s ethics time at the CLE, how many lawyers do you think stick around? It’s sad but true, and there are a lot of Georgia attorneys who are just unaware of their ethical obligations.
2. They know they’re wrong and just don’t care. Hey now. Lawyers knowingly acting unethically? That could never happen, right?

There are also lots of firms who actually do care about legal ethics and won’t do mail-away closings. We’re one of them. We can give you a long list of others, too. We take our ethical obligations seriously. Hopefully that’s understandable.

Oh, come on. What’s the worst that could happen?

Well, now. Here’s the rub. Unless someone has a current Georgia bar card, they’re called a non-lawyer. Makes sense, huh? And if that non-lawyer, say the mere notary, facilitates the execution a deed of conveyance (including, but not limited to, a warranty deed, limited warranty deed, quitclaim deed, security deed, and deed to secure debt) and other legal instruments required in a real estate closing, whelp, then you’ve got someone engaging in the unauthorized practice of law. Says who? Supreme Court of Georgia. And engaging in the unauthorized practice of law is bad.

And a lawyer who supervises something like that? They’re assisting the non-lawyer in the unauthorized practice of law. That also is pretty bad.

Oh, and then, if we’re talking about a mail-away for a loan that ends up in bankruptcy, then even more bad things could happen. Like the security deed could potentially be set aside by a Chapter 7 trustee because it wasn’t executed pursuant to Georgia law. Then the trustee could bring an action against the lender seeking damages, treble damages, costs, and attorneys fees. This is all very, very bad. Here’s an article from DSNews, and it says ” … a lender conducting mail-away or witness-only closings in Georgia may want to explore their potential liability under this code section, or possibly risk substantial losses.”

“Substantial losses.” That sound OK?

TL;DR

The ethical rules prohibit a Georgia lawyer from participating in the closing ceremony by telephone and require the ceremony be in the lawyer’s physical presence. Delegating the signing of the closing papers to anyone other than a licensed Georgia attorney is ethically improper.

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