When Does My Client Need Greater Representation?

When Does My Client Need Greater Representation Than I Can Provide As Their Agent?

February 2014 Legal Update from Marty Stanton, Esq.

This past month one of our clients asked me to discuss agency law and how it differs in Maryland, the District of Columbia and Virginia. In preparing for the discussion I was drawn to something that I think is important for all of you to understand. Agents are able to tell other parties in a transaction what their client authorizes them to say – nothing more and nothing less. Agents cannot speak on behalf of their clients, only lawyers can. This distinction on the surface may not seem like much but it is fundamental. It is one of the reasons that Maryland changed its law forbidding real estate agents from negotiating short sales on behalf of their clients.

The new law in Maryland called the MD Mars Act requires that anyone who assists homeowners with trying to negotiate with their lenders are either (1) attorneys who engage in loss mitigation as their regular area of practice or (2) companies or individuals who comply with all of the requirements of the new law. The position of the Maryland Real Estate Commission is that negotiating short sales falls outside the scope of a real estate license. Real estate agents do a great job and can provide the services necessary to get the house sold. But, what they cannot provide is legal advice answering questions with legal implications such as: "why can't I just walk away" and "am I liable for the deficiency." At KVS, we realized with this change your clients would need proper legal representation. We conducted some research and are happy to refer the firm of Adams, Morris and Sessing (AMS).

As many of you know listing a successful short sale is a time consuming, complex and lengthy process. The attorneys at AMS are able to represent your client during this emotional and stressful time. They will take your client through the short sale process step by step from the time the listing is signed until settlement. This is a win-win or you. Your clients get the best representation and you get to go sell more houses. AMS will:

Conduct an initial consultation to discuss all relevant options for the homeowner. Assist with preparation of lender specific financial documents, hardship letter, review all the requested financial documents and check the title for other liens before submitting the request to the lender.
Keep in constant contact with your client's lender(s) to make sure that the file is moving forward and send weekly updates to all parties to make sure the buyer of the property stays interested.
Protect your client's interests. At AMS they are not just negotiators or back room paper processors, they are attorneys with an understanding of the various state laws and lender programs as they apply to your client's situation. Lender programs are constantly changing and your clients need an experienced attorney protecting their interests.
Go to court to stop foreclosures when necessary and they represent your client in mediation in MD and DC; fight for your client's right to take control of the situation and work towards the best result for them, not the bank.

So what does AMS charge? The initial consultation for your client is free and the maximum charge to them for this service is $1,500. AMS offers payment installments and the fee is not even due until there is an offer on the property. Because your client hires them, AMS is there to make sure that any possible outcome is to your client's advantage. They work for the homeowner – not you, not KVS and not the lender. As lawyers AMS can speak on your client's behalf and work toward an efficient solution. I would encourage you to contact AMS if you need more information about services or if you have clients who are in need of legal assistance with their short sale. For more information please contact Melissa Brault, Esq. at 301-637-0143 x105 or at Melissa@amslawgroup.com.

– Marty