Do you need a real estate attorney to close in Tennessee?

What does Tennessee law require?

We did not find a statute or court rule in the official sources we could read that says a buyer or seller must use an attorney to close. That is different from saying every closing is open to anyone. Tennessee law restricts who may do “law business,” and the line is drawn by what the work requires.

In Opinion 07-88 (June 6, 2007), the Attorney General analyzed Tenn. Code Ann. § 23-3-101:

• The “practice of law” in § 23-3-101(2) means drawing papers or documents “in connection with proceedings pending or prospective before any court.” Deeds, deeds of trust, releases of liens, sale contracts and escrow agreements are transactional, so the opinion says preparing them is not the practice of law.
• “Law business” in § 23-3-101(1) includes drawing, or helping draw, “for a valuable consideration” a paper or instrument “affecting or relating to secular rights.” The opinion says that preparing those documents for pay can fall within it.
• Section 23-3-103(a) bars anyone, including a company, from practicing law or doing law business without a license.
• Citing In re Petition of Burson (Tenn. 1995), the opinion says that acts of law business by a non-lawyer are unauthorized practice “only if the doing of those acts requires the ‘professional judgment of a lawyer,’” so each case turns on its facts.

An Attorney General opinion is advisory and dates from 2007; it is not a court ruling. Treat it as the state’s published reading, and ask a Tennessee lawyer if your transaction is unusual.

Who runs a closing in practice?

The sources we could read do not describe who conducts closings in Tennessee, and we do not state a custom. What they do show:

• The 2007 opinion discusses a 1959 Tennessee Supreme Court case, Bar Association of Tennessee v. Union Planters Title Guaranty Co., suggesting title companies may draft some documents tied to their business. The Attorney General noted that the case’s continued validity “may be questionable” and that it was narrowly confined.
• Real estate agents are licensed by the Tennessee Real Estate Commission, and engaging in the unauthorized practice of law is one of the listed grounds for disciplining a licensee. The Commission also says it cannot provide legal advice or represent private individuals.

So an agent can explain a process, but cannot stand in for a lawyer on a legal question. See closing costs in Tennessee and our national guide to title insurance for the other closing participants.

What does an attorney cost?

No official source we read publishes a typical Tennessee closing-attorney fee, so we do not give a range. Fees depend on who you hire, whether the lawyer only reviews the contract or also handles the closing and title work, and how complex the deal is. Ask for the fee in writing before you sign an engagement, and compare it with the lines on your Loan Estimate and Closing Disclosure (see our closing costs guide).

When is a lawyer worth it anyway?

The law does not require one, so this is a judgment call, not a legal rule. A lawyer can advise on legal questions an agent may not answer, such as how to read the seller’s disclosure rights, a contract contingency, an easement, or a title problem. Free options exist for people who qualify: Help4TN points Tennesseans to Tennessee Free Legal Answers, where you can ask a lawyer a legal question at no cost.

If an agent’s conduct is the problem, you can file a complaint with the Commission. It says it cannot recover money for you. If you win a court judgment against a licensee and cannot collect, the Education and Recovery Account can pay up to $15,000 per transaction, and up to $30,000 in total for the acts of one licensee, once the conditions on the Commission’s page are met. For a purchase in Nashville the rules are the same.