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Wednesday, July 24, 2013

New to Colorado? Most Real Estate Transactions Here Are Lawyer-Free

[Published July 25, 2013, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

We Coloradans have come to take it for granted that you don’t have to hire a lawyer to buy or sell real estate. Our contracts all have a clause advising the client to consult a lawyer (and a tax advisor), but ever since a court decision called Conway Bogue made it legal for real estate licensees to complete (and explain) state approved contracts or forms, clients usually make an informed decision not to expend money on consulting a lawyer. I’ve never seen a lawyer attend any of my closings (except when my clients were themselves lawyers).

This is quite different from other states. In New York, it is common for every party in every transaction to have their own lawyer.

What we can’t do is to interpret and explain to buyers those contracts which sellers — notably new home builders — have their own lawyers prepare. If you buy a new home, you can expect your agent to advise you to have a lawyer review the contract for you, because we would be practicing law if we did that.

Our license does not allow us to write addenda or additional provisions to insert in the state approved forms, so many brokerages pay a flat fee to a prominent Colorado law firm for their library of lawyer-composed clauses and forms.  (Money well spent!)

That doesn’t mean that we can’t write simple additional provisions for contracts such as “Seller shall have roof replaced” or that we can’t insert the list of demands to put in an inspection objection notice.  In that case, however, it’s a good practice to have the client dictate what he or she wants included so that the agent can say he merely inserted them in the form and did not compose them himself.

I’ve been told that “a lot of attorneys” don’t accept that real estate licensees should have the authority granted under Conway Bogue, but it is certainly an established fact that lawyers have little role in the typical Colorado real estate transaction.

1 comment:

  1. Although it is so important to hire the services of a lawyer to review the contracts, I still find this move by Colorado a good one because it saves sellers from having to spend so much on hiring lawyers. There are simple transactions that do not need the opinions of lawyers. :)