Mispresented by a Pseudo RE Attorney! (Texas, buyers, buy)
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I feel like I stepped into the middle of a word problem and need to eliminate the " extra" information to solve. So let's take the termites off the table.
Being an attorney state is not the same thing as being an attorneyreview state. An attorney state means the settlement/closing agent must be an impartial attorney. I believe there are 6-7 such states, in the U.S. and last time I checked, NY was not one of them.
As an aside, some Western states do not rely on attorneys for anything to do with common real estate transactions. In those states, real estate agents are allowed to add language, amendements, create riders and addendums. This sort of behavior is probhibited in some states, such as my own, Illinois.)
Being an attorney review state means that the standard real estate contracts provide for attorney review/modification/approval. I believe that NY is one of the many states that use such contracts. ( I have bought and sold personal real estate in NY about 18 years ago.) This means it's customary for both principals to have their attorneys review and approve the contract. Being customary is not however, a law.
It sounds like you thought you were using an attorney and then learned he was not. It also sounds as though neither real estate broker representing either the buyer or the seller is set up to be an escrow agent and it was assumed by all parties that your attorney (who is not an attorney) could also be the escrow agent.
Putting aside that your attorney is not an attorney, not all attorneys who actually are attorneys, serve as escrow agents. When this happens, it is customary for the attorney to designate an independent (escrow) agent. This sounds like what your attorney ( who is not an attorney) did.
Now to the real fun part....In my state, it is common for real estate attorneys to serve as title agents for title companies on an outsourced basis. It is also common for the seller's attorney to serve in this capasity in my state. The title agent is the one who does the title search...different from issuing title insurance.
I am going to go out on a limb here and speculate that in NY, title agents are not required to be attorneys. This is however, not the same thing as representing a client's best interests from a legal perspective. And when confronted by your need for legal advise, the attorney, who is not an attorney, referred you to someone who is an attorney. In otherwords, I suspect the attorney, who is not an attorney, is an OK guy who knows his legal limits and assumptions may have been made by all parties.
I certainly hope that the reason this deal may go south is not because of the confusion associated with your legal representation or agent for the escrow funds. Now that would be a darn shame.
Having reread this, I suspect I may have further complicated this for you and so perhaps it's best for me to join you in a late evening Chivas and call it a day.
I'm definitely going to save your post because it really explains a couple of key differences in RE practice in different areas. Glad OP is meeting with a 'real" attorney today and now she has more things to add to her ever growing list of questions.
I still feel that when she walked into his office and wanted to hire him as her attorney, referred to him as 'her attorney', that he should have disclosed right then that he was a title agent - not a licensed attorney. He even went so far as to fill in/draft the contract, shoot it off to the buyer's attorney for review, have the seller's sign it and only when the termite thing and escrow come up he went "oh" and crossed off seller's attorney and put seller's agent (as the escrow agent).
In my mind that created misrepresentation because then she could have gone 'Oh my friends/neighbors said you were an attorney. Thanks for clarifying because, yes, I want to retain an attorney' and then she could have hired a 'real' one and this entire situation would not have happened. Man, is 9:00AM too early for that Chivas?
So, the attorney basically said, that the Title Agent was permitted to send out a contract, but he was not permitted to Legally represent another person, as that is practicing law without a license. So, he bailed out when I became concerned about our legal representation, as I instinctively felt that there was no one watching out for our best interests. He was working within his scope of practice, and didn't do anything illegal. However, there was certainly an elephant in the room in that he never provided the information that he was not a licensed and practicing attorney. The intricacies of a simple real estate transaction is amazing. Muchos gracias.
So, the attorney basically said, that the Title Agent was permitted to send out a contract, but he was not permitted to Legally represent another person, as that is practicing law without a license. So, he bailed out when I became concerned about our legal representation, as I instinctively felt that there was no one watching out for our best interests. He was working within his scope of practice, and didn't do anything illegal. However, there was certainly an elephant in the room in that he never provided the information that he was not a licensed and practicing attorney. The intricacies of a simple real estate transaction is amazing. Muchos gracias.
Thanks for the update and the Chivas, Tambre, and I just took a big swig! Glad your new attorney clarified things; just a shame that when you went to see the title agent he didn't tell you his profession (title agent v. licensed attorney), even after you referred to him as your attorney and only when you started feeling uneasy after he crossed off the escrow instructions after the whole termite thing came up that is when he 'clarified' that while, yes, he went to law school, he didn't pass the bar. Anyway, glad you have a good attorney now and boy did that big swig of Chivas help! Way to start a Monday
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That bottle of Malibu rum has my name all over it!!
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