Can Realtors Be Liable for the Unauthorized Practice of Law?

Realtors in Pennsylvania have been held liable for the unauthorized practice of law in situations where their actions extend beyond their licensed real estate activities and involve legal tasks that require specialized legal knowledge or representation. Pennsylvania courts have identified specific activities that constitute the practice of law, which include advising clients on legal rights and obligations, preparing legal documents requiring specialized legal knowledge, and representing clients before public tribunals.

Additionally, Pennsylvania law criminalizes the unauthorized practice of law. Realtors must avoid activities such as drafting complex legal documents or providing legal advice that goes beyond their expertise as real estate professionals. They are permitted to assist with document preparation and provide general assistance related to real estate transactions, but they must not perform tasks that require legal judgment or representation. For example, a court found that a broker did not engage in the unauthorized practice of law by furnishing and explaining legal forms and engaging in contract negotiations, as long as the broker did not hold itself out as a legal professional or act beyond its immediate business interests.

Simply stated, realtors in Pennsylvania may be held liable for the unauthorized practice of law if they engage in activities that require legal expertise, such as advising on legal rights, preparing non-routine legal documents, or representing clients in legal proceedings such as mediation, without being licensed attorneys.