Avoiding Unlicensed Practice of Law: Drafting Addendums

As you are all aware, a very important concern for many realtors is avoiding any claims that s/he committed the unlicensed practice of law (known as “UPL”). For this reason, the Florida Bar and Florida Association of Realtors have spent several years promulgating and revising the standard contracts and multiple addendums that realtors utilize on a daily basis. However, despite using the promulgated forms, we continue to encounter issues with certain contracts that could subject realtors to UPL claims.

For instance, the last paragraph of the FAR/BAR and FAR standard form contracts contain blank lines where parties can add “additional terms.” Certainly, there are many occasions that parties negotiate provisions that are not addressed in the form contract or that modify existing provisions in the contract. However, adding any language to the additional terms section is essentially drafting a legal provision.

We also receive contracts that contain an addendum that was drafted by an agent for one of the parties. Again, this is a legal document and the language is legally binding. If the language is not properly crafted or is unenforceable under the law, the realtor who drafted the provision could find himself in hot water when the parties realize it was not properly drafted.

Because of the significant risks involved in any potential exposure to a UPL claim, we always encourage agents to take two actions before attempting to add additional terms to a contract: (1) look through the form addendums provided by the Florida Bar and Florida Association of Realtors, as most common changes have a form addendum you can use; and (2) if there is no form addendum that addresses the additional provision or the form addendum must be dramatically modified, contact a real estate attorney to draft the language so that is properly drafted and legally binding. Taking these steps is not very time consuming and can save a world of headache in the future. If you have any questions regarding the foregoing, we urge you to please consult with your real estate attorney.

Berlin Patten Ebling, PLLC

This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

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