Legal Ethics

Check The Real Cost Of Your Real Property Litigation Fees

Those extra fees should have been on the house.

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judge finger wagging pointingFrom time to time, a large price tag is a sign of quality. Be careful though, you could just be getting ripped off. Real estate has a reputation for costing an arm and a leg, but that doesn’t justify snipping a finger or two while you’re at it by tagging on BS fees. Marcy Gendel found that out the hard way. From the ABA Journal:

A New Jersey lawyer has been suspended after an audit found that she overcharged clients in real estate transactions by collecting fake fees or fee amounts that were higher than the actual expenses incurred.

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The audit found that Gendel overcharged her clients for government recording fees, land survey fees and title insurance fees. She also routinely collected and retained fees that she never incurred for bank and overnight fees in real estate closings, according to an April decision by the New Jersey Supreme Court’s disciplinary deview board.

Gendel had said all the other lawyers were charging inflated fees, so she did too.

Sorry, the “I can break the law and make money on the side” only worked for Clarence Thomas back when there was no binding ethics code on Supreme Court justices. Now that even they’re no longer above the law, there’s no real good faith exception you can point to to excuse your unearned earnings.

You may be wondering how the ethics committee discovered Gendel’s scamming. It didn’t take ProPublica-level sleuthing — she just divulged her scheme in front of the wrong person:

The audit was ordered after Gendel allegedly blurted out during a real estate closing that she had come up with a way to take money from clients, and she was surprised that no one else had thought of it. Gendel allegedly said senior citizen clients could be charged realty transfer fees without the discount to which they were entitled. Then the lawyer could pay the reduced fee and keep the difference. She allegedly estimated that the scheme could allow an attorney to keep reap an extra $50,000 to $100,000 per year.

Gendel made the comment at a closing in front of her client, the listing realtor and another lawyer—who happened to be the ethics committee secretary for East Morris and Sussex counties. The other lawyer sent a letter to the New Jersey Office of Attorney Ethics about the conversation.

She would have gotten away with it too if not for that meddling lawyer who paid attention to her confession! Over a five-year period, Gendel duped her clients out of a whopping ~$67k. That might not sound like a lot at first blush, but for an additional $13k a year, just do what the Biglaw folks do and pick up a side gig. To any real estate lawyers reading this strapped for cash and thinking about how you can make a little extra money from your clients, your license will be healthier in the long term if you just pick up a few weekends riding Uber. Do better, Gendel.

Lawyer Suspended For Charging Inflated And Fake Fees To Real Estate Clients; Did Everybody Do It? [ABA Journal]

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Chris Williams became a social media manager and assistant editor for Above the Law in June 2021. Prior to joining the staff, he moonlighted as a minor Memelord™ in the Facebook group Law School Memes for Edgy T14s.  He endured Missouri long enough to graduate from Washington University in St. Louis School of Law. He is a former boatbuilder who cannot swim, a published author on critical race theory, philosophy, and humor, and has a love for cycling that occasionally annoys his peers. You can reach him by email at cwilliams@abovethelaw.com and by tweet at @WritesForRent.

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