Can a closing attorney, who does not represent a seller, charge that seller fees, including, but not limited to, disbursement fees, discharge tracking fees, wire fees, and courier fees, as part of a real estate closing?

No, according to an April 11, 2024, decision of the Rhode Island Supreme Court Ethics Advisory Panel, which determined that these violated the Rules of Professional Conduct.  Rule 1.5 requires fees to be either “a reasonable amount to which the client has agreed in advance” or “the cost incurred by the lawyer.” 

The Panel determined that neither condition was met because the sellers did not agree to the fees nor do the lenders generally charge these types of fees to closing attorneys, such as a wire fee to transfer funds from an IOLTA account, in which deposits are held.

If your client has a complaint against an attorney that cannot be resolved, the client can contact the Disciplinary Board.

Even though attorneys and real estate licensees have different rules, a similar message applies. Make sure to clearly explain fees and compensation to customers and clients and obtain their written consent in advance.

For more information, please contact the RIAR Legal Hot Line at 401-432-6945 or email [email protected].