1.8 Legal Standard of Care

• Library: Real Estate Transactions in Virginia (Virginia CLE) (2019 Ed.)

1.8 LEGAL STANDARD OF CARE

1.801 In General. Upon creation of an express or implied ¹²⁸ attorney-client relationship, the lawyer warrants that he or she (i) possesses or will acquire sufficient legal skill to serve adequately the interests of the client and (ii) will exercise a reasonable degree of legal care, skill, and diligence in representing those interests. ¹²⁹ In the context of real estate transactions, these implied duties include the implied duty to perform a complete title examination and issue a title opinion as well as the implied duty to determine the factual and legal validity of instruments.

1.802 Implied Attorney-Client Relationship. Merely being the only lawyer involved in handling a transaction or merely preparing a document for another may impliedly establish an attorney-client relationship with a person the lawyer does not intend to represent. ¹³⁰

1.803 Duties and Warranties to Nonclients. In acting on behalf of a client, the settlement attorney typically acquires or undertakes certain duties and warranties to nonclients. ¹³¹

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1.804 Limiting Liability, Duties, or Warranties. Although a lawyer may not attempt to limit his or her liability for personal malpractice, a lawyer may properly enter into express agreements with a client to limit the scope of responsibilities and warranties the lawyer would otherwise impliedly undertake in representing the client. Examples of these limitations include expressly excluding or limiting the scope of the title examination to be performed ¹³² or the title opinion to be rendered. ¹³³

1.805 Negligence. Negligence can serve as grounds for disciplinary penalties ¹³⁴ as well as for civil liability. ¹³⁵ Examples of negligence resulting in disciplinary penalties include:

1.	Failure to perform a complete title examination absent consent by the client; 136
2.	Negligent preparation and recordation of documents; 137
3.	Failure to deliver and record instruments; 138
4.	Failure to notify clients of liens; 139
5.	Misrepresenting the priority status of a deed of trust; 140

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6.	Failure to provide an accounting for settlement proceeds; 141
7.	Failure to obtain title insurance or refund a premium received in trust; 142
8.	Unreasonable delay in disbursing title insurance premiums; 143
9.	Unreasonable delay in satisfying existing liens; 144
10.	Premature payment of a real estate commission; 145 and
11.	Unreasonable delay in recording a deed. 146

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Notes:

^[128] See supra ¶ 1.402.

^[129] See Va. RPC 1.1, 1.3(a); see also Musselman v. Willoughby Corp., 230 Va. 337, 337 S.E.2d 724 (1985); Ortiz v. Barrett, 222 Va. 118, 278 S.E.2d 833 (1981); McCormick v. Romans, 214 Va. 144, 198 S.E.2d 651 (1973); Glenn v. Haynes, 192 Va. 574, 581, 66 S.E.2d 509, 513 (1951).

^[130] See supra ¶ 1.402.

^[131] See infra ¶¶ 1.13 (title insurance), 1.1701 (loan closing...