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Watch Out for the Unauthorized Practice of Law in Real Estate
Buying or selling a home is one of the most significant financial decisions many of us will make. It’s a complex process that brings together professionals from various fields—accountants, inspectors, lenders, real estate agents, and yes, lawyers.
But here’s something every buyer and seller needs to understand:
Real estate agents are not lawyers.
Unless your agent is also a licensed attorney, they are not qualified, nor legally permitted, to provide legal advice.
In this post, we are highlighting a critical issue that many consumers are not aware of, which is the Unauthorized Practice of Law (UPL) in real estate. Knowing what it is and how to spot it can help you protect yourself and your investment.
What Is the UPL?
The UPL occurs when someone who is not a licensed attorney performs legal tasks or gives legal advice. In real estate, this can include:
- Modifying legal contracts
- Interpreting legal terms or clauses
- Advising on rights or obligations under a contract
Even though your real estate agent may be highly experienced, only an attorney can legally interpret or draft legal language on your behalf. If your agent oversteps, it can result in serious consequences for your agent—including fines, revoked licenses, and even lawsuits—but more importantly it could have significant legal and financial ramifications for you going forward.
What the NAR Code of Ethics Says
“REALTORS® shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it.”
Unfortunately, this article isn’t followed by additional “Standards of Practice,” which makes it harder for agents and clients to interpret. That’s why we appreciated the clear guidance in this NAR Magazine article on the UPL. It breaks it down like this:
“Most states prohibit non-lawyers from drafting contracts. However, it is generally acceptable for real estate professionals representing consumers to insert factual information—like party identities, property identifiers, and amounts—into blank attorney-approved form agreements. But making modifications beyond factual information or offering legal interpretations of provisions likely constitutes the unauthorized practice of law.”
What the Louisiana Statutes Say Is the Practice of Law
RS 37:212 – “Practice of law” defined
A. The practice of law means and includes:
(1) In a representative capacity, the appearance as an advocate, or the drawing of papers, pleadings or documents, or the performance of any act in connection with pending or prospective proceedings before any court of record in this state; or
(2) For a consideration, reward, or pecuniary benefit, present or anticipated, direct or indirect;
(a) The advising or counseling of another as to secular law;
(b) In behalf of another, the drawing or procuring, or the assisting in the drawing or procuring of a paper, document, or instrument affecting or relating to secular rights;
(c) The doing of any act, in behalf of another, tending to obtain or secure for the other the prevention or the redress of a wrong or the enforcement or establishment of a right; or
(d) Certifying or giving opinions, or rendering a title opinion as a basis of any title insurance report or title insurance policy as provided in R.S. 22:512(17), as it relates to title to immovable property or any interest therein or as to the rank or priority or validity of a lien, privilege or mortgage as well as the preparation of acts of sale, mortgages, credit sales or any acts or other documents passing titles to or encumbering immovable property.(emphasis added)
What This Means for You
As the old saying goes, “Stick to the facts, Jack.” Your agent can, and should (with your consent and agreement), fill in the blanks on standard contracts with factual information.
But:
- They should not explain or interpret legal clauses.
- They should not modify agreements beyond what’s allowed by state law.
- They must refer you to an attorney if you need legal advice.
If you ever feel that your agent is straying into legal territory, pause the conversation and consult a lawyer. This is to protect yourself.
A Critical Reminder: Know What You’re Signing
One of the most common—and risky—areas where the UPL happens is with Listing Agreements and Buyer Agreements. These are binding legal contracts. Signing them without fully understanding what you are agreeing to can lead to serious legal and financial consequences. Before you hire an agent, your agent may not be fully in your corner and probably has at least some divergent interests at that time.
So here’s the takeaway:
- Do not sign anything unless you fully understand it.
- If you have questions, get legal advice—not just your agent’s interpretation.
Final Thoughts
Your real estate agent is a valuable partner in the home buying or selling process. But when it comes to legal advice, they have to stay in their lane. The unauthorized practice of law is a serious issue and it’s up to both agents and clients to recognize the line between real estate guidance and legal counsel.
When in doubt, ask a lawyer.
Mintzer Legal is here for you if needed.
