Court Opinion

ID: 9767260
Source: CourtListenerOpinion
Date Created: 2023-08-29 05:14:31.26372+00
Date Added: 2024-06-11T07:30:29.885943
License: Public Domain

SCHREIBER, J.,
dissenting.
The Court is sanctioning the practice of law by realtors whose conduct in most cases will not have been reviewed by a member of the bar. When that occurs, the parties will never have had an attorney’s advice on the legal consequences of provisions to which they have agreed or on the legal consequences of the failure to have included provisions needed for their protection. Because the Court-approved settlement disserves the public interest, I must dissent.
In State v. Bander, 56 N.J. 196 (1970), this Court questioned whether a real estate broker, who filled in and added a few clauses to a Blumberg form for the sale of real property, had engaged in the unauthorized practice of law. It concluded that “the problem has so many ramifications that it could not be *483intelligently considered on the present record.” Id. at 202. The Court suggested that an answer might be obtained in a separate suit so that “a complete and detailed record could be made disclosing, inter alia, the extent, length of existence, effect and result of the performance of similar acts by real estate brokers generally and the public need for such service.” Id. at 202-03. This action was instituted in response to that suggestion. Rather than resolving the issue posed in Bander in the manner suggested, the parties entered into a settlement with far broader ramifications, conditioned on this Court’s approval.
This Court in approving the settlement has gone far beyond the issue stated in Bander. Now realtors may not only fill in a form, but also negotiate and draft the entire contract for the sale of any residential property up to and including four-family houses as well as leases of any duration for residential units. The Court implicitly acknowledges that the realtors will be practicing law, as well it must. See Cape May Cty. Bar Ass’n v. Ludlam, 45 N.J. 121, 124 (1965); New Jersey State Bar Ass’n v. Northern N.J. Mtge. Assocs., 32 N.J. 430, 444 (1960).
This settlement countenances the practice of law by those not qualified as lawyers. In approving this settlement the Court ignores the public interest in ensuring that only licensed practitioners provide legal advice. Admission to the bar is a privilege granted in the public interest for the purpose of protecting “the unwary and ignorant from injury at the hands of persons unskilled or unlearned in the law.” New Jersey State Bar Ass’n v. Northern N.J. Mtge. Assocs.,22 N.J. 184, 195 (1956). [T]he licensing of law practitioners is not designed to give rise to a professional monopoly, but rather to serve the public right to protection against unlearned and unskilled advice and service in matters relating to the science of the law.” Auerbacher v. Wood, 142 N.J.Eq. 484, 486 (E. & A.1947).
The settlement upon which this Court puts its imprimatur clashes with the protection to which the public is entitled. I do npt accept the underlying assumptions in the settlement that the few provisions to be inserted in some residential sales and lease *484agreements are an adequate safeguard of interests that the Court should seek to protect.
A written warning at the top of the first page that a party “may choose to consult an attorney who can review and cancel the contract” can scarcely serve as an adequate safeguard. Leases of less than one year need not even contain that language.1 In those situations where the language appears, what assurance is there that the purchaser or seller will read the contract or that the realtor will read that advice to the parties? The realtor is interested in making the sale and earning his commission. It is natural for him to gain his customer’s confidence and trust and to encourage the parties to sign the contract. It is also easy to assure the lay person that an attorney is not needed and that the seller or buyer should avoid an unnecessary cost. Indeed, the realtor will frequently arrange for the financing, advising the purchaser that the lending institution’s attorney will protect his interest.
Until today we have almost uniformly adhered to our rule that “[n]o person shall practice law in this State unless he is an *485attorney, holding a plenary license to practice in this State .... ” R. l:21-l(a). The exceptions have been limited to members of the bar of other states, R. 1:21-2 and R. l:21-3(d), and to third year law students and law school graduates serving a legal aid society, legal services project, or an agency of municipal, county or state government. R. l:21-3(c). In each of these limited areas, the legal practice or activity is carried on by a person with substantial legal training under the supervision of a member of the bar in good standing. Such supervision is nonexistent in this settlement.
This is not to say that under some circumstances it may not be practical and feasible for the realtor to prepare some documents incident to real estate transactions at the request of his customers. However, it should be remembered that the contract with its many terms and conditions is probably the most important document in the entire transaction from the point of view of the parties. If a line must be drawn within which realtors may practice law, it would seem appropriate that it depend on the subject matter of the advice and the nature of the realtor’s acts, rather than the type of structure to be conveyed.
Furthermore, as set forth in the settlement, the attorney is the only one who can cause the revocation of the contract or lease. Why the attorney, and not the party, should be given that power is unclear. Vesting the attorney rather than the individual with the power of revocation means that when a party changes his mind about a transaction he must engage a lawyer. Thus the protection of unilateral rescission will only be available for those individuals who are willing to pay and can afford to hire an attorney. Moreover, there is merit in the comment of Legal Services of New Jersey, Inc., when it writes:
“Attorney disapproval” seems to place the entire burden of decision on the attorney, which would be highly questionable ethically and undesirable as a practical matter. The attorney may think certain provisions are unwise or loose, but for any number of reasons be unwilling to take a rigid stand of disapproval. Since the client should be the one making the ultimate decision, it would be better to have the communication expressed in terms of rejection by the client, rather than disapproval by the attorney ....
*486Indeed, the clause is unclear as to whether the right of revocation depends upon the attorney’s reason, if any. If that reason may simply be the client’s desire to withdraw from the transaction, why must the individual engage an attorney and why should that not be made clear on the face of the instrument? The line drawn within which realtors may practice law seems to have been determined by the economic interests of the realtors and attorneys, rather than societal interests. Those who will be subject to the unauthorized practice of law are mostly low and moderate income individuals who are buying or leasing homes. However, only when the financial stakes are likely to be higher must the realtor step aside to be replaced by the attorney.
This case was settled during the third day of trial. The record which the Bander opinion called for has not been made. That record should be completed. The Court should determine the conduct to be interdicted as the unauthorized practice of law in light of the public interest, rather than acquiescing in the settlement of the controversy.
For affirmance as modified — Chief Justice WILENTZ, and Justices CLIFFORD, HANDLER and POLLOCK — 4.
Dissenting — Justice SCHREIBER — 1.

Because the Court is requiring that leases of residential units for one year or more contain this provision, I would agree with the Public Advocate that the proviso should be inserted in all written leases. He writes:
From a legal point of view, if a realtor’s preparing a one year lease is potentially unauthorized practice of law, against which consumers need to be protected by the opportunity to interpose the judgment of a lawyer, there seems to be no rational basis for concluding that a realtor’s preparation of a six-month lease or a month to month lease is not also potentially unauthorized practice of law. Many residential tenants live for years under the terms of month-to-month leases. These leases often contain provisions that are illegal or highly disadvantageous to the tenant. The opportunity to consult a lawyer before such a lease becomes effective would be advantageous to a prospective rentor faced with a month-to-month or short-term lease.
It is worth noting that, with the growing availability of prepaid legal service plans, more and more prospective rentors will have access to lawyers at modest cost for just this type of “preventive law” consultation. The increased availability of these services means that extension of the protections ... to shorter-term leases is likely to have practical value.