Connecticut law requires that attorneys handle real estate closings involving title insurance, which is commonly required when a buyer is borrowing money from a lender to purchase property.
By prohibiting non-attorneys from handling most types of real estate transactions, Public Act No. 19-88, adopted in 2019, provides safeguards that codify what was already common practice.
That doesn’t mean it removed all the risks, however.
For example, a former Stamford attorney was sentenced in November to a year and a day in prison for stealing more than $700,000 from his real estate clients.
The attorney received funds from clients and knew he was required to deposit those funds in an Interest on Lawyers’ Trust Account (“IOLTA Account”) and use them in accordance with his duties to each client, according to a news release from the U.S. Attorney’s Office.
A Connecticut Statewide Grievance Committee revealed that more than $1.27 million was due to the attorney’s clients, but the IOLTA Account held less than $600,000, the news release said.
A subsequent criminal investigation revealed that the attorney defrauded clients by using funds in his IOLTA Account to cover funds owed to others, and for his own use, according to the news release, which said the attorney “made false representations to clients, including providing a false and inaccurate closing statement to at least one individual, to prevent the scheme from being uncovered.”
The attorney pleaded guilty to wire fraud. In addition to the prison sentence, he was ordered to pay full restitution by U.S. District Judge Victor A. Bolden in New Haven.
Examples of similar wrongdoing are not difficult to find in Connecticut and beyond, including these from this year and last:
- Former Norwalk lawyer charged with stealing nearly $2 million from clients in real estate deals
- Former Atlanta attorney convicted of stealing millions of dollars from clients
- NY real estate lawyer Kossoff gets up to 13.5 years for theft of client funds
Experiences like those underscore the importance of working with experienced real estate attorneys and law firms whose size, scale, and track record ensure trustworthiness and signify success.
That may seem like obvious advice, but the results for online searches asking how to find a good real estate attorney suggest things like asking a friend, or simply Googling “real estate lawyers near me.”
This seemingly casual approach may stem from two misperceptions, that all real estate attorneys are essentially comparable, and that any attorney can competently handle a real estate closing – because real estate transactions often, but not always, follow an established series of steps.
Real estate clients should ask potential attorneys a series of vetting questions, starting with basics like:
- How much experience do you have with real estate transactions?
- What types of real estate closings do you typically handle, mostly residential or mostly commercial?
- How many closings do you handle each year?
- Will I work with you directly or will paralegals be handling my closing?
- Do you see any issues or complexities with my transaction?
- Can you detail the fees involved and how billing will be handled?
Beyond those basics are other issues that real estate attorneys at larger, established firms like Cramer & Anderson will detail as reassurances. For example:
- The firm has insurance to cover issues arising from real estate transactions, and that includes cyber insurance in the event of a fraudulent claim, which many firms don’t have.
- The firm’s highly experienced real estate attorneys hold qualifications as certified title counsel for various title insurance companies, a sign of the Cramer & Anderson’s high standing in Real Estate Law.
- Our work on real estate transactions includes a rigorous series of check-and-balances that ensures everything proceeds as trouble free as possible.
Cramer & Anderson has an extensive commercial and residential real estate practice serving businesses and individuals throughout Connecticut that includes all aspects of the acquisition and sale of real estate, commercial and residential development, leases, financing and refinancing syndications, portfolio planning and consulting, environmental compliance, like-kind exchanges, condominium creation/conversion, and more.
See our Residential & Commercial Real Estate Law page for details, or connect directly with the members of our real estate team, who have decades of experience.
About Cramer & Anderson
Cramer & Anderson provides sophisticated legal services, close to home, with regional offices in New Milford, Washington Depot, Kent, Litchfield, Danbury, and Ridgefield. For more information, see the firm’s website or call the flagship office in New Milford at (860) 355-2631.