Do you need a real estate attorney in New York?

Does New York require an attorney?

The sources reviewed for this article contain no rule saying a buyer or seller must retain a lawyer. What they contain is a limit on who may do legal work. The Department of State’s Legal Memorandum LI04 states the rule in three layers:

• Judiciary Law § 478 prohibits the practice of law by non-attorneys.
• Judiciary Law § 484 says that no one may ask or receive compensation for preparing deeds, mortgages, assignments, discharges, leases or other instruments affecting real estate unless admitted to practice as an attorney.
• Violating either section is a misdemeanor (Judiciary Law § 485), and the Department of State can also act against a broker’s or salesperson’s license.

So the choice is not “attorney or no attorney.” It is who does the legal work: a lawyer you hire, or nobody with authority to do it for you.

Who can write the contract of sale?

The memorandum describes what brokers and salespersons may do:

1. Fill in a simple contract. They can complete a fill-in-the-blanks purchase contract, but only if it is made subject to the approval of each party’s attorney.
2. Use a bar-approved form. Alternatively, they can use a form approved by a joint committee of the county bar association and realtors association. Even then they fill in only non-legal facts: names, closing date and place, property description and price.
3. Stay out of legal terms. They may not develop legal terms, give legal advice, or discourage a party from seeing a lawyer. They also may not add provisions to an approved contract unless the whole contract is conditioned on each party’s attorney’s review and approval.

The memorandum also says the contract should state clearly on its face that it is legally binding and recommend that the parties seek a lawyer’s advice before signing.

The court decision the Department relies on, Duncan & Hill Realty v. Department of State, explains why. The court called a home purchase “often the most important legal transaction that the average person will ever undertake.” It noted that the broker works for one side, so a lawyer should prepare the legal parts “to ensure the deliberate consideration and protection of the interests and rights of the parties.”

Practical result: an “attorney review” clause in a New York contract is the broker’s safe harbor. It makes the deal depend on both sides’ lawyers approving the paper.

What does a lawyer cover that nobody else can?

Based on the rules above, the legal tasks that belong to a lawyer include:

The sources above do not describe a lawyer’s other closing tasks, such as title review. For those, see title insurance explained and closing costs explained. For state-specific costs, see closing costs in New York.

What does an attorney cost?

No official source sets a typical fee, so this article gives none. Fees depend on the lawyer, the type of property and how complex the deal is. Ask for the fee in writing before you hire. Compare it with the other charges in the closing costs article.

Does the seller’s lawyer help with disclosure?

New York sellers of one-to-four family homes must deliver the Department of State’s disclosure statement before the buyer signs (Real Property Law § 462). Sellers fill it out from their own knowledge; the law says nothing about a lawyer. Some sales, such as foreclosure sales and sales by estate fiduciaries, are exempt (§ 463). See seller disclosure in New York.

What about the agent’s license?

Brokers and salespersons are licensed by the Department of State. To check one, see verify a license in New York.