May a real estate attorney rely on a title search performed by an unsupervised nonlawyer abstract firm when rendering title opinions?

Plain-English summary

An attorney obtained a circular from a title or abstract firm offering title-examination services to attorneys for a flat fee per tract. The firm's nonlawyer employee performed a search on a parcel and mailed back a summary, link sheets, deed copies, tax printouts, and conveyance records, but said she would not render a title opinion. The firm employed no attorney, the attorney never trained or supervised the firm's employees and was not asked to, and the attorney knew nothing of the firm's financial standing or insurance. The inquiry asked whether the attorney could rely on that abstract in rendering title opinions to clients, lenders, or title insurers, and what duty the attorney owed to investigate or supervise.

The opinion concluded that the attorney may not rely on such an abstract. Under Rule 3.3(a), an attorney must ensure the firm has procedures reasonably assuring that the conduct of any nonlawyer it employs or retains "is compatible with the professional obligations of the lawyer." Under Rule 6(a)(2), an attorney may not handle a legal matter "without preparation adequate under the circumstances." Relying on a title search by a nonlawyer the attorney did not supervise is not adequate preparation for rendering a title opinion or drafting a deed in reliance on that information. The attorney is required to supervise and evaluate the nonlawyer assistant, and an attorney relying on nonlawyer assistants, whether employed by the firm or contracted with, must make reasonable efforts to ensure the nonlawyer's conduct is compatible with the lawyer's professional obligations.

Currency note

This opinion was issued in 1987, before the North Carolina State Bar's adoption of the 2003 revisions to the Rules of Professional Conduct (the bar notes that for subsequent history, see RPC 216). The provisions it applies (Rule 3.3(a) on responsibilities for nonlawyer assistants and Rule 6(a)(2) on adequate preparation) have since been renumbered and revised (the corresponding Model Rules are 5.3 and 1.1). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can an attorney rely on a nonlawyer abstract firm's title search for a title opinion?

A: No, where the attorney neither supervised nor evaluated the nonlawyer's work. The opinion concluded that relying on such an unsupervised search is not preparation adequate under the circumstances under Rule 6(a)(2).

Q: What duty does an attorney owe over a contracted nonlawyer's work?

A: The opinion concluded the attorney must supervise and evaluate the nonlawyer assistant and make reasonable efforts to ensure the nonlawyer's conduct is compatible with the lawyer's professional obligations under Rule 3.3(a), whether the nonlawyer is employed by the firm or retained.

Q: Does it matter that the abstract firm did not render a title opinion itself?

A: The opinion concluded the attorney still could not rely on the abstract for a title opinion or deed, because the attorney's own preparation was inadequate without supervision and evaluation of the nonlawyer's work.

Background and rules framework

The opinion applied two North Carolina rules: Rule 3.3(a) on a lawyer's responsibilities for the conduct of nonlawyer assistants (corresponding to Model Rule 5.3) and Rule 6(a)(2) on handling a matter only with preparation adequate under the circumstances (corresponding to Model Rule 1.1, competence). The analysis turned on the attorney's lack of supervision and evaluation of the nonlawyer abstractor's work.

Citations and references

Rules of Professional Conduct:

• North Carolina Rule 3.3(a) (responsibilities regarding nonlawyer assistants)
• North Carolina Rule 6(a)(2) (adequate preparation)
• MR 5.3 (responsibilities regarding nonlawyer assistance); MR 1.1 (competence)

Other opinions cited:

• RPC 216 (cited by the bar's editor's note for subsequent history)

See also

• NC Ethics Op. RPC 44: attorney's obligation to follow closing instructions
• NC Ethics Op. RPC 38: temporary placement of attorneys

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/rpc-29/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Editor's Note: This opinion was originally published as RPC 29 (Revised). For subsequent history, see RPC 216.

Inquiry:

Attorney picks up a circular for a title or abstract firm, which states that the firm offers title examination services to attorneys for a flat fee of seventy dollars ($70.00) per tract plus copy costs.

Thereafter, attorney speaks with an employee of the firm who states that she can do a title search on a parcel of real property as above stated. She further states that she will telephone with any problems and that she will send a title summary and copies of the relevant documents. She states that she will not render an opinion on the title.

Attorney then gives her a deed book reference for a tract of land and requests a title examination. Thereafter, attorney received a mailing from the firm which includes the following:

• Summary page indicating an abbreviated property description, the mortgages or deeds of trust, the tax listing information and judgments;

• "Link" sheet for one descendant's estate;

• "Link" sheet for the deeds represented to be in the chain of title with a copy of each deed;

• City ad valorem tax printout signed by a City employee; and

• Computer printout of the "out" conveyances for two (2) of the parties in the chain of title from the Register of Deeds. (The "out" conveyances for the owners prior to 1982 were listed on the link sheet by the firm's employee because the Registry does not have conveyances prior to such time on the computer.)

Attorney was not telephoned regarding examination or examination process. The firm does not employ an attorney. The work was performed by a nonlicensed person. Attorney did not train or supervise the firm and was not requested to do so. Attorney has no knowledge regarding the firm's financial standing or liability insurance.

May attorney ethically rely upon the firm's "Abstract" or "Title Search" in rendering title opinions to clients, lenders or title insurance companies?

If so, what duty, if any, does attorney owe to investigate, evaluate, train and/or supervise firm's employees?

Opinion:

An attorney is responsible under Rule 3.3(a) to ensure that his firm has procedures which will reasonably assure that the conduct of any nonlawyer either employed or retained by that firm "is compatible with the professional obligations of the lawyer..." Further, an attorney may not ethically handle any "legal matter without preparation adequate under the circumstances." Rule 6(a)(2). For an attorney to rely on an abstract or title search by a nonlawyer not supervised by the attorney or the firm does not constitute adequate preparation under the circumstances for rendering of a title opinion or drafting a deed in reliance on the information disclosed by this title abstract or search. An attorney is required to supervise and evaluate the nonlawyer assistant. An attorney relying on nonlawyer assistants, whether employed by his firm or contracted with, must make reasonable efforts to ensure that the nonlawyer's conduct is compatible with the lawyer's professional obligations, including his ethical obligations as required by Rule 3.3(a).