100 years + of collective legal malpractice experience

Did your lawyer make a mistake in your real estate matter?

by | Mar 3, 2023 | Duty of Care, Investigation and Discovery, Legal Malpractice, Real Estate Malpractice, Transactional Malpractice |

When a party purchases real estate, they usually have an intended use for the parcel. It is common to retain an attorney to facilitate the transaction. The clients reasonably expect that the lawyer will do what needs to be done to transfer ownership of the real estate ready for the purpose intended.

Sometimes after buying realty, a party finds themselves unable to move forward with their intentions for the property because of a legal restriction on the land’s use. If they had legal counsel for the transaction, could the lawyer be responsible for not having uncovered the legal defect before their client wasted their money on real estate that is somehow off limits for their intended use?

Examples of potential restrictions on land use an attorney could uncover before the land purchase include environmental restrictions, zoning issues, easements or rights-of-way, water restrictions or rights, private or public roads, liens or mortgages, leases, potential of planned use to create a nuisance or interfere with view rights, title issues, environmental responsibility like that for removing a buried storage tank, and others.

A Florida example

A Florida couple, the Atkins, wanted to buy a lot in Monroe County on which to build a house and retained lawyer Charles Tittle to represent them in the matter. A couple of years after the land purchase, local government authorities denied their application for a residential building permit based on a zoning problem. Namely, the lot was in a zone that required a minimum lot size in order to build and the parcel in question was too small for home construction.

The Atkins sued their attorney in state court, alleging that he had committed legal malpractice by not researching before the purchase went through whether the local zoning laws permitted them to build their house on the lot. The jury agreed with the allegations, but the court instead directed a verdict for the lawyer, saying that the lawyer did what he was hired to do, investigated matters “brought to his attention” and did not need to look at land use and zoning issues because he was not retained to do so.

This raises a common issue in lawyer negligence cases dealing with realty transfers: whether the buyer’s lawyer’s duty of care only requires that they need to perform the specific acts to facilitate the sale (document review or preparation, execution and filing), or whether the attorney must address other related tasks and issues inherent in or that arise during the course of the representation.

Lawyer’s duty to address legal issues related to the representation

On appeal, the court said that the jury had adequate evidence to find that the lawyer breached his professional duties to the Atkins and reversed the trial court’s directed verdict for the lawyer.

Specifically, the appellate court wrote that “the record contains evidence from which the jury could lawfully find that Tittle neglected a reasonable duty and proximately caused the Atkins’ damages.”

The attorney amended the purchase agreement to account for another legal issue that otherwise may have impacted buildability. By this act, he “undertook an inquiry into whether the lot was buildable.” Expert testimony at trial said that if he had investigated the first buildability issue, he would have uncovered the zoning problem. The court concluded that even without that first inquiry, he still had an obligation to either research the zoning issue or advise the clients to do so.

His failure to “act with a reasonable degree of care, skill, and dispatch” was negligent.

Seek legal advice

An important takeaway is that real estate transfers are factually and legally complex, which may muddy the representation boundary between the actual mechanisms used to execute a sale or other transfer, and broader investigation of related, potential roadblocks. Anyone who believes their former legal counsel may have breached a duty of care to see that their client’s goals for a parcel were attainable should speak with a legal malpractice lawyer.