Real Estate Record

AND     BUILDERS'    GUIDE.





Vol. XVII.





NEW YOEK, SATURDAY, JUNE 24, 1876.





No. 432.





Published Weekly by

THE REAL ESTATE RECORD ASSOCIATION. '

C. W. SWEET...............Pbesident and Tbeasubeb

PRESTON L SWEET...........Seceetabv.              j

L. ISRAELS.........................Business Ma.»jageb i

TERMS.                                              I

OIVE YEAR, in advance___$10 00.             i

Commtinications should be addressed to                                i

C.   ^iV,   STVEJET,          I

Nos. 345 AND 347 Broadway

LEGAL  FEES.





The members of the legal profession, from the
necessities of the case, are the natural custodians
of real estate interests. Few transactions are con¬
summated without their aid or supervision. When
the services oi lawyers are ignored or waived
trouble is the almost inevitable consequence.
Men imagine that they buy and sell land, when,
in fact, they deal merely with the titles to the
land. If the title is good it conveys, at the best,
but a qualified enjoyment of the land, subject to
the taxes, or interest, or ground-rent, or cove¬
nants more or less exacting. If the title is bad,
the land would be hardly leas available to the
purchaser if waUed about as high as heaven.
These titles are matters of history and law—or
rather of historical record—and require a knowl¬
edge of the intricate principles of law. The
methods of conveyance are antiquated, cumber¬
some and puzzling to the ordinary man of busi¬
ness, hence the high function of the legal pro¬
fession.

This subject of legal fees in connection with
real eatate matters deserves more extended and
serious treatment tban we can here afford to give
it. Practically lawyers stand as the great toll-
gatherers over every transaction, great or smaU.
It is safe to say that the immoderate exactions
practiced by a strong and influential miaority
of them, have tended to disgust the public with
real estate transactions, and have laid burdens
upon this important interest altogether too
heavy to be borne. As indispensable and valu¬
able as these legal services are, it is well known
that they constitute the least honored, though
most lucrative, branch of the profession—
a branch at all events usually devolving
upon the subordinate members of a legal
firm, or else attended to by the managing
clerk of the office. So far as the exam¬
ination of titles is concerned, the work is
to a great extent mechanical. The various
official searches ftimish the necessary data
for investigation. With few exceptions the
titles to New York property have been so often
examined and re-examined that a clear beaten
track is discernible through most of them. We
have known a lawyer, in an important convey¬
ance, to adopt the seller's abstract, without any
pains of verification, and to accept convey¬
ance under the same, without misgiving or
Bpruple, charging'therefor a round fee.    A. Free¬





masonry may be said to exist among the differ¬
ent law offices, so that the work of one office is
frequently appropriated and made use of in an¬
other. The hieroglyphics and cabalistic signs
of one managing clerk are clearly intelligible to
another: thus, the labor of original resetirch is
saved, though clients are mulcted in the same
fee as if such labor was performed.

With the lawyers rest the all-important ques¬
tion of the validity of the title. Any flaw or de¬
fect, real or imaginary, constitutes a cloud upon
the title which interferes seriously with any dis¬
position of it. It is easy to see that with such
an arbitrary control or monopoly of the ques¬
tion of titles, a great power is concentrated
in the legal profession. The ability to produce
ft clean bill of health, or a passport to negotia¬
bility, is a vitally important matter to the owner
and seller of property. This constitutes the basis
of immoderate charges; not for services actu¬
ally rendered, or pecuniary responsibility as¬
sumed, but—solely the necessities of clients.
The abuses practiced by lawyers are chiefly
in connection with mortgage loans, where
the parties on the one side are needy and
urgent borrowers, and on the other side
wealthy corporations or individuals. The tariff
of charges heretofore exacted, in many of
these cases has been simply ruinous and pro¬
hibitory, partaking of the nature of an excessive
discount from the sum borrowed. Even in the
case of the purchase and sale of property the
fees charged for the examination of titles consti¬
tute a considerable item to be added to the pur¬
chase price. We can state our case more clearly
by examples. A distinguished jurist once said
in our hearing, that in his early professional
life he had occasion to examine the title of what is
now known as the Brandreth House—a property
that even in those primitive times was worth some
fraction of a million dollars. For thi? service he
received a fee of seventy-five dollars. In con¬
trast to this we would place the remark of anoth¬
er distingushed coimsel, who recently said that
for an examination of any title, however simple,
he considered a fee of one thousand dollars barely
adequate. These cases present the extremes
of moderation and extravagance, but it cannot
be denied that the average fee for the examina¬
tion of titles is somewhere midway between
these two amounts, in the case of mortgage
loans the absurd rule of charging one per cent,
being almost universally enforced, while in the
matter of purchase and sale the same rule serves
as an approximate standard.

The true basis for legal charges" should be the
actual amount of labor performed and intelli¬
gence displayed. The record of titles is easily
accessible, and the-principles of law involved in
a great majority of them are well settled and
established by familiar decisions aad usages.
There are lawyers of high standing who dis¬
card the percentage principle altogether, as un¬





becoming to the profession, and calculated to
place it upon the plane of brokerage and otber
non-professional employments.    The hardship
of counsel bills is felt not only in the round sum
exacted as a fee, and which the counsel appro¬
priates entirely to his own use, but an abuse
is also experienced in the matter of search fees.
We have known a case where loans were pro¬
cured on a block of buildings, the title to which
was one and undivided, involving but one set of
searches; yet tbese searches were multiplied to
coirespond to the number of buildings, and
the total cost of the searches assessed upon each
building, heavily increasing the expense of the
examination.    Besides the fee and the searches,
borrowars are frequently amazed at the prices
charged  for  the   various  papers  required in
real estate transactions,   i'or instance, for tbe
preparation of deeds and bonds and mortgages
we have known a fee of twelve or fifteen dollars
to be charged, and have rarely known less than
ten dollars to be charged for either of these in¬
struments.    When it is   considered  that this
class of work consists merely in the filling out
of a blank form famished by the stationer, a
task performed by the scrivener of the law office,
we can perceive the monstrous disproportion of
the charge.    The profit to be derived from pre¬
paring such papers at the rate of five dollars
each would constitute a handsome income for
an average law-office.     Other written instru¬
ments—such as party-wall agreements and spe¬
cial covenants—are charged for in the same pro¬
portion, and go to swell the unwelcome total of
the oounael's biU.

We are aware that we are dealing with a deU¬
cate subject in thus assailing the stronghold of
the law. But in these times of retrenchment
and reform we feel it due to the special interest
that we represent to call attention to these glar¬
ing abuses.

This whole subject of legal charges requires
investigation and reconstruction, before we-can
expect the dawning again of that sorely-missed
activity and prosperity in real estate affairs.
Lawyers have been gorged and surfeited, during
the halcyon days of real estate and railroad spec-
ulatior, with colossal fees and emoluments.
They have grown wealthy, as is too plainly evi¬
denced in the sumptuous style of office and fam¬
ily life enjoyed by the leaders of the profession.
Alas! some few have fallen the sad victims of
intense devotion to greed. While capital and
labor have been riven to their very centres by
the shock of disaster, and are stiU reehng under
the weight of accumulated losseg, it behooves
the gentlemen of this grand profession to con¬
sider the goose and the golden egg; if that fable
lacks appositeness. then the spider and the fly.
At all events reduce your rates, learned gentle¬
men, not in small percentages, but a good round
fifty per cent., tuad when your lately impover¬
ished client seeks to bargain with you as to your