Bulletin: MA2025001

Dear Associates:

This is a reminder to our Massachusetts policy issuing agents and approved attorneys who are also Massachusetts attorneys.

All Massachusetts attorneys must comply with the ethical rules known as the Massachusetts Rules of Professional Conduct (MRPC) which are part of the Massachusetts Supreme Judicial Court Rules. These rules can be found here:  Supreme Judicial Court Rule 3:07: Rules of Professional Conduct | Mass.gov  

In December 2022, the Office of Bar Counsel published an article highlighting MRPC 1.8(a) which deals, in part, with the limitations and requirements surrounding when a lawyer can enter into a business transaction with a client. You can read the article on the BBO’s website here: The Cost of Doing Business (With a Client)

The article emphasizes that although MRPC 1.8(a) does not define business transactions, the rules make clear that law-related services fall within Rule 1.8(a). Law-related services are discussed in more detail in MRPC 5.7.  The article points to Comment 9 to Rule 5.7, which provides a non-exclusive list of law-related services. This list includes the sale of title insurance. Further, the article identifies that Comment 1 to Rule 1.8 also mentions title insurance.

The article concludes that compliance with MRPC 1.8(a) in the sale of title insurance is mandatory, even if such disclosure is not required by state and federal mortgage regulations. In order to achieve compliance, the article states that the attorney must:

1. Disclose to the buyer the cost of the policy;
2. Advise the clients of the desirability of seeking independent legal advice as to the purchase of the policy;
3. Clearly inform the clients of the lawyer’s role in the sale of the policy (which presumably includes disclosure of the lawyer’s share of the policy commission); and
4. Secure the clients’ written consent to the terms of the transaction.

The Office of the Bar Counsel encourages Massachusetts lawyers to contact its Ethical Helpline to obtain direct, personal guidance on interpreting and applying the Rules of Professional Conduct. The Helpline is open on Mondays, Wednesdays, and Fridays from 2:00 to 4:00 p.m. and can be reached at 617-728-8750.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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