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James R. Kobleur,
Attorney at Law
Savannah, Georgia

I am asked, often, (1) Whether Georgia is a "Lawyer Only" State and, if so, (2) whether a lawyer is needed when the borrowers are located in Georgia but the property is in another State. Questions also arise regarding (3) whether a lawyer must conduct the closing in a situation where Georgia real estate is given as security when a loan is closed outside the State.

Most people in the loan industry use the term "Lawyer Only State" to refer to those states which require that a lawyer (as opposed to a Notary or other "Loan Signing Agent") conduct all loan closings in which real property is given as security for the loan, even if the lawyer's role involves only explaining the documents and witnessing the signing of those documents but does not require the lawyer to perform a title search or other activities normally associated with closing a real estate loan. The question arises most often in the context of a Refinancing of an existing loan ("REFI") or the granting of a Home Equity Line of Credit ("HELOC") where the lender has prepared its own loan documents and has obtained a title search from a non-lawyer or from a lawyer other than the person conducting the closing.

Question (1), "Is Georgia a Lawyer Only State?" was answered definitively by the Georgia Supreme Court in November 10, 2003 when it issued a ruling in the case designated: IN RE UPL ADVISORY OPINION 2003-2 (277 Ga. 472). That case held that a so called "Witness-Only" closing may be conducted only by a lawyer in Georgia. The Supreme Court Opinion, with slight formatting changes to increase readability for the lay person, and the UPL (Unauthorized Practice of Law) Opinion from the State Bar on which the Supreme Court Opinion is based, may be read HERE (http://www.kobleur.net/Lawyer_Only2.html).

***Questions (2) and (3) have not been addressed by the Georgia Courts, to the best of my knowledge, and my opinion, expressed below, does not constitute legal advice and should not be relied upon by anyone in making a decision regarding the issues discussed. You should consult your own attorney concerning the state of the law applicable to your particular situation.

Question (2), "Is a lawyer required for a closing when the borrowers are located in Georgia but the real property given as security for the loan is located in a state other than Georgia? It appears that the Supreme Court decision referenced above, although not specifically addressing the question presented, did not limit its Opinion to real property located in Georgia and would clearly require that a lawyer conduct the closing in this situation. The practice of law, as it relates to conveyancing, is an activity unrelated to the location of the property involved. As the Georgia Supreme Court has ruled that the actions of overseeing the closing, reviewing and explaining documents and obtaining signatures constitutes the practice of law in Georgia, the location of the real property is immaterial. It is the actions, in the State of Georgia, of the individual conducting the closing which are subject to Georgia Law, not the property itself. If those actions are conducted in Georgia then it is highly likely that the Court's Opinion applies and a lawyer is required. My only caveat to this position would be a loan closing conducted in Georgia but involving real property located in those states which use Mortgages (or other instruments which merely create a lien against property) as opposed to Security Deeds or Deeds to Secure Debt. Security Deeds and Deeds to Secure Debt, as used in Georgia, actually convey legal title to the property used as security for the loan to the Grantee, the lender, while leaving the Grantor, the borrower, with equitable title. Mortgages, on the other hand create a lien against property used as security for the loan but leave legal title in the landowner, the borrower. Since the rationale of the Supreme Court opinion rests, at least in part, on the fact that only lawyers may prepare and supervise the creation and execution of a "deed of conveyance", the Court might hold that a closing conducted in Georgia but involving a loan secured by a mortgage on real property in another state does not constitute "conveyancing", because of the lack of a "Deed of Conveyance", and thus conducting such a closing might not constitute the practice of law. However, even in this situation, it is more likely that the Court would hold that a mortgage conveys a lien from Mortgagor to Mortgagee and is thus a conveyancing transaction, regardless of the absence of a "Deed of Conveyance".

Question (3), "Is a lawyer required for a loan closing conducted in a state other than Georgia but in which Georgia real property is given as security?" In my opinion, the answer is No. Under our legal system, a State Court's jurisdiction, in most cases, is limited to acts occurring within its geographic boundaries. The Georgia Supreme Court has jurisdiction to define what actions constitute the practice of law in Georgia but that jurisdiction does not extend to acts carried out in other states. Each individual state has the right to define the "Practice of Law" within its boundaries and those states, such as California, which allow notaries to conduct "Witness Only" closings within their boundaries are not bound by the Georgia Supreme Court's Opinion as to what constitutes the practice of law. It is the location of the closing rather than the location of the property which governs whether the closing must be conducted by an attorney.

***Again, I stress that my answers to questions (2) and (3) are only my opinion! You should consult your own attorney concerning the legal status of your actions in those situations.

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Originally posted by dfye@mcttelecom.com

Not your typical lawyer!

Legal Eagle Para Professional Services

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Originally posted by LindaH

"each of us has a different perspective with experiences that range widely. It is good to listen to others and to assimilate information from a variety of sources"

We aren't talking experiences and personal interpretations here...we're talking matters of law - and who better to interpret them and advise as to their impact than an attorney (yourself) practicing law and doing real estate closings in GA (like yourself)??

Linda

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Originally posted by jbelmont

You can not do loan signing in GA unless you are an attorney. But if you live near a state border, you might be able to get a dual commission and do signings in the neighboring state. Also, if you know how to market yourself, there is regular notary work to be done in GA. Jails, hospitals, offices, etc.

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Originally posted by jbelmont

You can not do loan signing in GA unless you are an attorney. But if you live near a state border, you might be able to get a dual commission and do signings in the neighboring state. Also, if you know how to market yourself, there is regular notary work to be done in GA. Jails, hospitals, offices, etc.

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