The Supreme Court of South Carolina
JEAN HOEFER TOAL
1231 GERVAIS STREET
Members of the South Carolina Bar
|RE:||Guidelines for Attorneys Conducting
Residential Real Estate Closings
|DATE:||September 23, 2009
The South Carolina Bar Task Force on Closing Responsibilities (Task Force) developed guidelines or “best practices” for attorneys conducting residential or commercial real estate closings in South Carolina and submitted them to this Court for consideration. On February 21, 2008, the Court issued a request for written comments and notice of a public hearing to be held on May 7, 2008. Input was received from various committees of the South Carolina Bar, the financial community, title insurance companies and individual attorneys who practice in the area of real estate closings. Thereafter, the Court asked the Task Force to consider several common concerns voiced by those who provided input and determine whether they believed any changes were warranted.
The Task Force determined, and this Court agrees, that the two main concerns set forth in the written statements and at the public hearing pertained to whether the guidelines were necessary for commercial real estate transactions and whether a South Carolina lawyer should no longer be required to act as the closing attorney for home equity line of credit closings (HELOCs).
The Task Force, upon reconvening, unanimously agreed that the suggested guidelines should be explicitly limited to residential real estate closings because it appears, from the majority of opinions issued by this Court regarding closings, that it is residential closings that are overwhelmingly the professional concern. However, the Task Force noted that commercial real estate transactions are extremely important and it remains steadfast in its unanimous belief that State v. Buyers Service Co., Inc., 292 S.C. 426, 357 S.E.2d 15 (1987), remains highly relevant and of great importance to all real estate transactions, whether residential or commercial, in this state.
With regard to HELOCs, the Task Force unanimously agreed that HELOCs “should continue under the requirements now existing related to certain duties being performed by lawyers licensed in the State of South Carolina, or admitted to practice in the State of South Carolina, and fall within the . . . ‘Guidelines for a Closing Attorney in Non-Purchase Residential Real Estate Transactions, Including First Mortgage Loan Closings and Junior Lien Mortgage Closings,” previously suggested by the Task Force.
Finally, the Task Force suggested changing the guidelines and lists to delete the approval of certain documents from the tasks to be performed by attorneys in residential closings.
This Court believes that publishing the revised versions of the “Guidelines for a Closing Attorney in Non-Purchase Residential Real Estate Transactions, including First Mortgage Loan Closings and Junior Lien Mortgage Closings,” the “Guidelines for a Closing Attorney in a Residential Real Estate Purchase,” and the list of tasks “[i]n relation to Residential Real Estate Purchases, First Mortgage Loan Closings, and Junior Lien Loan Closings in South Carolina” that only lawyers licensed in South Carolina or admitted to practice in South Carolina may perform as a Best Practices Model would benefit the Bar in the area of residential real estate closings. We emphasize that these guidelines, which are enclosed with this memorandum, are not applicable to commercial real estate closings. We also emphasize that the guidelines are not being adopted by this Court as rules nor endorsed by the Court, but are instead being published as a Best Practices Model developed by a cross-section of those who practice most frequently in the area of real estate transactions for the benefit of the Bar.
Finally, the Task Force is to be commended on the time and effort spent on developing the guidelines. Their dedication to upholding the integrity of the legal profession and to protecting the public is apparent from their willingness to participate in this endeavor, their willingness to consider the opinions of the various professionals involved in the real estate closing process, and their ability to develop a comprehensive set of ideas that will serve to guide those involved through the real estate closing process.
 The Task Force prepared a list of tasks that only lawyers licensed or admitted to the practice law in the State of South Carolina can perform in residential real estate purchases, first mortgage loan closings and junior lien loan closings, and a separate list for commercial real estate transactions. The Task Force also prepared “Guidelines for a Closing Attorney in Non-Purchase Residential Real Estate Transactions, including First Mortgage Loan Closing and Junior Lien Mortgage Closings” and “Guidelines for a Closing Attorney in a Residential Real Estate Purchase.”