The High Road: Some lawyers shirk due diligence

Some lawyers work really hard, others take it easy. (Flickr photo by jcoterhals)

As in any profession, there are good apples and bad ones.

When it comes to real estate lawyers, the bad ones are more likely to be lazy than incompetent.

However, I have to say that the  challenge of practicing residential real estate law often is less demanding than, say, intellectual property or medical malpractice law.  (That’s not to say I don’t know some terrific real estate lawyers.)

My issue with the lazy lawyers whom I’ve encountered here in Manhattan is that they do not fully perform the due diligence required of them.  After all, they bear fiduciary duty to their clients, many of whom are committing to the biggest purchase of their lives.

What are some of the things that the lazy lawyers don’t do?

They don’t make the trip to a property managers office to inspect the minutes of condo or co-op boards of managers or directors.  They don’t examine offering plans.  They don’t analyze budgets.  They don’t take the extra step in the case of a purchase in a new development of checking out the building sponsor and its track record.

While most lawyers seem to be dutiful about conducting their due diligence, some are way too casual about communicating with their clients and their broker representatives.

Their failure to keep everyone in the loop makes them questionably competent in my mind as well.  The left and right hands always must be in sync.

I remember a buyer’s lawyer a year or so ago who neglected to keep me informed or, worse, to respond to my urgent phone messages at the eleventh hour toward closing.  He was negotiating a narrow, but essential, issue having to do with a missing certificate of occupancy and the potential cost of getting one.

But he was unaware of a critical point that I had just learned, that the apartment would go into foreclosure if settlement didn’t occur on schedule in the following two days.  Knowing that would have strengthened his hand.

You’ve heard that maxim about the foolishness of lawyers who represent themselves.

Even more foolish are the clients who fail to investigate fully via trustworthy references the dedication of their prospective attorney to conducting the vital due diligence that can prevent, or at least mitigate, the harm of entering into the wrong contract.

Subscribe by Email

Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

Malcolm@ServiceYouCanTrust.com
Web site

Advertisements

One thought on “The High Road: Some lawyers shirk due diligence

  1. What an excellent post! Since I’m enmeshed in a lawsuit against my coop’s majority shareholders — and departed from my first lawyer for my current terrific one — I’m highly sensitized to the performance of real estate lawyers.
    My first lawyer, a wonderful smart guy I’d known for years, did not warn me to check the credit and credentials of the family who were buying the majority shares, nor did he offer to do it himself.
    When two years later I finally did, I learned that in their home town of Dayton, Ohio, the county court had over 50 lawsuits against them, almost all of which were for unpaid debts, some of them mortgages.
    Had I known anything about these people before they closed, I — as the only remaining Board member — would never have signed off on their purchase.
    Of course that’s locking the ole barn door long after the horse got out.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s