Where does a transaction coordinator stop being admin and start practicing law on assignment files?

Question

Take a wholesaler keeping 9 to 11 files open at once, mostly assignments with a few double closes, paying a coordinator $500 a file. She is good. She is also, over time, doing things she was not hired for, like choosing which assignment addendum goes on the file and filling in a closing date because the title company said that week was lighter. She has also emailed the buyer directly about extending the inspection period. An attorney consulted on an unrelated title issue will often say flatly that some of that could be a problem depending on the state, since the coordinator holds no license of any kind. Before that conversation most operators assume anything clerical is fine as long as they sign. So where is the actual line, and how does it get written into a scope document without making the coordinator useless? On a double close there is the further question of whether that is one file or two for billing, since she is running two sets of deadlines and two settlement statements for one $500 fee.

Rena Expert · Accepted Answer

The usual test in unauthorized practice of law questions is whether the person is choosing the terms or recording terms someone else chose, and it's drawn differently in every state, so an attorney licensed where you close needs to read your scope document once. Filling in a closing date you supplied is clerical. Selecting which assignment addendum fits the deal, or setting a date because the title company suggested it, is a judgment about the contract, and in a lot of states that sits with you, your broker, or a lawyer.

The second exposure is your state real estate commission rather than the courts. Many states have unlicensed assistant rules that permit administrative work and prohibit discussing terms or negotiating with the other side. Your coordinator emailing your buyer about extending inspection is the activity most likely to land on the wrong side of that, especially if she is proposing the extension rather than transmitting one you approved. Confirm the current rule with the commission in writing, since these get revised.

Check her E&O policy for an exclusion covering claims arising from unlicensed or unauthorized activity. Those exclusions are common, and the moment she is the one who chose the form, that's where the carrier will look. Yours matters too.

On the double close, you're paying one fee for two files. Two contracts, two settlement statements, two sets of contingency dates, and the A to B side usually has a lender timeline the B to C side doesn't. Price it as two, or you'll find out what her real capacity is when four of them stack.

One thing you haven't raised: she should not be touching earnest money or the assignment fee wire. Funds handling is the title or escrow side, and coordinators who get near it inherit a liability their fee does not cover.

omar_haddad · Answer

This is a scope document problem and it reads exactly like the ones I get on renovation jobs. The reason your coordinator started choosing addenda is that nobody wrote down who chooses. On my side that turns into a framer deciding where a wall goes because the plan was ambiguous, and then I'm paying twice.

Write a two column list. Left column is things she fills in from information you give her. Right column is things that come back to you before they go out. Selecting a form and setting any date that has money attached to it belongs on the right.

raj_mehta14 · Answer

The funds point deserves a closer look. Many operators assume the coordinator is the one confirming the assignment fee actually got wired, since that is the number the whole deal turns on. If that sits outside her scope, who tells the investor the wire landed, the escrow officer or the buyer? That belongs in writing before the next file opens.

megan_doyle15 · Answer

Dumb question but is a scope document just a paragraph in the contract, or a separate signed thing?

renee_dubois · Answer

@megandoyle15 Separate, and dated. The clean structure is a one page attachment to the coordinator agreement that gets replaced rather than edited when the scope changes. @carlosnunez The piece worth adding is the deadline calendar itself. Have the coordinator send a dated list at contract with every date pulled off the executed agreement, and sign it back. That does two things. It catches transcription errors while they are cheap, and it puts the date selection on record as the investor's own decision. It costs about ten minutes a file.

tashaford30 · Answer

This thread sharpens the question of what an investor is actually buying when hiring a coordinator. If the coordinator cannot pick a form or propose an extension, and cannot touch funds, then the value is deadline tracking and document chasing. That may well be worth $500 a file. Most people hiring one assume they are buying more judgment than that, and the gap is worth knowing before the first file.

Where does a transaction coordinator stop being admin and start practicing law on assignment files?

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