Copyright 2013. All rights reserved worldwide.

Using a Texas Real Estate Lawyer

by David J. Willis
Attorney at Law

A good real estate lawyer can help an investor make money and, once he or she has it, help that investor hang on to it. How? Mostly by preventing the proverbial horse from getting out of the barn in the first place. In too many cases, the horse is not only out of the barn but well down the road before the investor finally bites the bullet (I’m having fun mixing metaphors here) and talks to a qualified attorney. This is unnecessary and, ultimately, not cost-effective. The almost irresistible urge to “do it yourself” (often with forms off the internet that are not designed with Texas law in mind) can have expensive consequences.

Most board-certified real estate lawyers who have been around a while charge for preparing documents, conducting closings, filing lawsuits, and so forth. Accept the reality of this and understand that some modest legal fees will always be a part of your cost of doing business in this highly litigious profession. Recognize that if you are going to be in this business for the long term, you need two professionals you can call at will and without hesitation: your real estate lawyer and a C.P.A. who understands the investing business. Neither one of these professionals will charge an established client for occasional calls. I get them every day. Examples: Should I do this? Am I opening up myself to a lawsuit with treble damages if I do? Do you have a better idea how this transaction might be structured?

Good real estate lawyers are delighted to take these calls without charge from investor clients. Why? Because first, we have the opportunity to keep our clients out of trouble before they get into it. We really are concerned with this. We want to keep our clients on solid ground and we want to save them money. The second reason is that we learn from these calls. That’s right. Every situation is unique. When someone asks how a certain transaction should be structured, it forces us to think and come up with an answer. It makes us better lawyers.

There is a theory, popular among realtors, that lawyers kill deals. There may be some truth to this if you are talking about non-real estate lawyers who do not know better. However, those of us who represent investors, brokers, buyers, sellers, and the like for a living could not stay in the business if we had a reputation for killing deals. Every good real estate lawyer knows that it is his or her job to help make the deal happen on the best terms possible for his client. We are on your side.

I have many horror stories I could tell, but I will relate only one of them. A California investor became interested in an apartment complex in Houston. He signed a “standard form” earnest money contract (let me give you a hint: there are no “standard” forms for anything in this business, except for amateurs who naively think that TREC or TAR forms are designed to protect them). He did this because he wanted to avoid attorney fees. He then allowed the seller to guide him to an unknown title company in Houston which, as it turns out, was owned by offshore interests. Let’s call this title company “Shady Title.” He did not talk to a lawyer about this because he wanted to avoid attorney fees. The investor put down $50,000 in earnest money, payable to Shady Title, with no effective escape clauses in the agreement. Again, he wanted to avoid attorney fees.

To make a long story short, the seller (an empty corporation, not even in title on the property) reneged and Shady Title’s offices were found abandoned the following week. It was a $50,000 loss for the investor - who now wants to sue but does not want to pay an attorney to do it!

Allow me to give you 10 reasons why you need a good real estate lawyer:

  1. the documents he prepares are Texas specific;
  2. these documents are current and up-to-date with changes in Texas law;
  3. documents are customized to your business model, not for someone in Idaho;
  4. documents are continually revised and improved with each use or closing;
  5. the opportunity to offload liability on the attorney (you have enough liability just being an investor);
  6. the availability of follow-up services (questions, supplementary documents, responding to title company queries, etc.), ie., having your lawyer "on call;"
  7. and, for closings conducted at your lawyer's office (rather than at John and Mary's kitchen table) the:
    • added credibility of closing at an attorney's office;
    • availability of a skilled attorney to make last-minute revisions, re-run documents, and create new ones if needed;
    • availability of an attorney to explain documents, which may assist in getting signatures of reluctant parties; and
    • availability of facilities and services (conference room, notary, copier, etc.).

A final word about board certified lawyers: use them. The law is highly specialized now, even sub-specialized, and no matter what your legal needs are you should seek out a board-certified attorney in that area. Board certified lawyers must have:

  1. five years minimum experience;
  2. ten peer recommendations;
  3. pass a specialization exam that is tougher than the bar exam;
  4. more stringent CLE requirements; and
  5. re-certification every 5 years.

Note that there are three separate certifications and three separate exams, one for residential, one for commercial, and one for farm and ranch.

If you check your yellow pages under “Attorneys,” you will find general listings and then, at the end, the names of board certified lawyers. Look under “Board Certified - Residential Real Estate Law” and “Board Certified - Commercial Real Estate Law.” I know most of these lawyers. They do good work. Call one before you do your next deal.


Information in this article is proved for general educational purposes only and is not offered as legal advice upon which anyone may rely. Legal counsel relating to your individual needs and circumstances is advisable before taking any action that has legal consequences. Consult your tax advisor as well. This firm does not represent you unless and until it is retained and expressly retained in writing to do so.

Copyright © 2013 by David J. Willis. David J. Willis is board certified in both residential and commercial real estate law by the Texas Board of Legal Specialization. More information is available at his website, http://www.LoneStarLandLaw.com.

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