In re William E. Paplauskas
Legal Case
SummaryThe Rhode Island Supreme Court rules that non-attorney signing agents, who are agents of a title company providing title insurance for a Rhode Island real estate transaction, may perform loan signing services.
AffectsNotary Signing Agents who perform loan signings in Rhode Island.
Changes
- Allows title insurance companies and their agents who are non-attorneys to conduct closings in a consumer real estate transaction in which a title insurance policy has been issued.
- Requires a non-attorney closing agent to communicate with a buyer and the seller that the closing agent is not an attorney, does not represent the buyer or seller, cannot give legal advice; and that if they have a legal question, they should suspend the closing and seek counsel from an attorney.
- Requires a non-attorney closing agent to present as the first document to be signed a written notice containing the representations mentioned above in #2.
- Requires a non-attorney closing agent to require the buyer and seller to sign a copy of the notice to acknowledge that the non-attorney closing agent has given the warnings and that they understand them.
- Requires the non-attorney closing agent to sign the notice to acknowledge that the closing agent has orally explained the notice to the buyer and seller.
- Requires the non-attorney closing agent to retain the signed copy of the notice and provide a copy to both the buyer and seller.
AnalysisIn 2018, William E. Paplauskas, a Notary Signing Agent, was investigated by the Committee on the Unauthorized Practice of Law of the Rhode Island Supreme Court for allegedly providing legal advice and services in a Rhode Island real estate closing. The Committee issued a report finding that Paplauskas did in fact engage in the unauthorized practice of law and petitioned the Supreme Court to rule that all real estate closings in Rhode Island constitute the practice of law. Two years later, the Supreme Court issued its opinion determining to leave intact the prevailing practice in Rhode Island over the last 100 years allowing title insurance companies and its (non-attorney) agents to provide real estate closings where there is a title insurance policy issued in the transaction. Paplauskas was found not to have practiced law. The Court was impressed by Paplauskas’s practice of requiring all parties in his transactions to sign a document which clarified that he was not an attorney and unable to provide legal advice. Paplauskas told the NNA he got the idea from the NNA’s “Notary Signing Agent Pledge of Ethical Practice.”
The Court said all non-attorneys providing closing services must present to the parties a similar document for signing. The Court held that allowing non-attorneys to provide closing services increases competition which in turn drives down the cost of a real estate closing. Most importantly, no evidence of harm to consumers was presented to the Court in connection with the Paplauskas matter. The Court said it would prefer that consumers retain counsel for their real estate closing and that if it heard of cases in which consumers were harmed by non-attorneys conducting loan closings in the future it would intervene. Nevertheless, the Court said it was best to uphold the current state of the law allowing title insurance companies and their agents to perform closing services in which the transaction included the issuance of a title insurance policy.
Read the Supreme Court opinion.