Real estate transactions are known for being complex and costly affairs. However, this should not be misconstrued as a license to levy unmerited charges or collect fees in excess of the associated costs. A recent case involving New Jersey lawyer Marcy Gendel, reported by the ABA Journal, serves as a startling reminder of the potential consequences of such malpractice.
Upon completing an audit, Gendel was found to have been overcharging her clients for various services related to real estate transactions including government recording fees, land survey fees, and title insurance fees. Notably, she had been regularly collecting and retaining fees for bank and overnight fees in real estate closings – services which she never actually provided.
In a rather dubious justification for her actions, Gendel claimed that she was merely leveling the playing field by charging inflated fees similar to her contemporaries. Unfortunately for her, the “I can break the law and make money on the side” argument holds very little legal merit, especially considering that even Supreme Court Justices are not permitted such liberties.
While this unethical behavior may seem like an anomaly, it begs the question – how much oversight is there really in the real estate legal sector? How did Gendel’s rule-bending go unnoticed for so long? It turns out, the violation was brought to light quite by accident, during a confession Gendel made in the presence of an individual who happened to be the ethics committee secretary for East Morris and Sussex counties. The resulting audit was ordered after this revelation.
It’s important to note that while Gendel’s actions resulted in her suspension and a shortfall of roughly $67,000 over a period of five years to her clients, there are ethical, legal ways to increase income. Side jobs such as driving for Uber are suggested as better alternatives that won’t jeopardize one’s law license.
ABA Journal’s Coverage on the Incident provides more detailed insight into the matter.
In summation, legal professionals, particularly those overseeing real estate transactions, must ensure complete transparency with their clients in terms of costs and charges. Not only is it ethically sound, but as highlighted by Gendel’s case, it also drastically reduces the risk of legal sanctions and reputational damage.