Sometimes what can appear to be ....initially a very simple transaction can snowball (especially good analogy for our "Sprow...or Sling season now in Wisconsin....Spring is Soooo not here yet !) into lots of legal complications. It doesn't matter what YOU believe as an agent or lender or any other professional who has been summoned to appear....It is what the law allows.....and at least initially...there are no boundaries to what can be required of you...how much time it takes...money you spend...distance you drive..copies you make...it is your legal duty with the threat of contempt of court...punishable by monetary penalties, imprisonment or other sanctions as the court may deem appropriate.
If you think this could never happen to you....you document everything... you have a Broker's license..you have been in the business for decades...you don't have "those" kind of clients...you would be wrong. You don't control the Buyer or the Seller no matter who you represent. They have a free will...and if they choose(or more likely their counsel does) to seek out every pocket as shallow or deep as it may be and name everyone and their Aunt, Uncle and Cousin in some course of legal action to prove whatever point...get whatever damages...they do...and you have zero, zip, nadda...no choice but to respond to what may appear to you to be nonsensical demands. It is not about you....or common sense. During the "discovery" portion of a legal action, attorneys can ask whatever they wish....and you will provide it.
IF for some reason you believe that some correspondence...be it text, email or snail mail could be considered "reasonably confidential" or your client has asked you to keep that information confidential....You may tell the inquiring lawyer you wish to declare a "Legitimate Claim of Privilege" keeping the communications concerning "XYZ" confidential because....state your reason in detail. Reasons can be because it was requested by the client or the information is "reasonably confidential" and unrelated to the issues at hand. Beware...because YOU reaonably believe it...does not necessarily mean that the lawyer(s) will agree with you and you may be required to produce it anyway.
Do not assume, if you are working with a party who has a lawyer...be it a divorce or other buyer or seller that any correspondence between you and the lawyer has attorney/client privilege...most probably it does not unless the lawyer is also being paid by you.
Are any legal expenses covered by your E&O Insurance ? Hmmm...policies differ....no one answer fits all. Of course IF it does cover some or the expense it would be after payment of the deductible...in our part of the world very typically $2500. You certainly value your time....and that can be copious hours you cannot bill for or recoup.
Our advice....treat every transaction....and the organization thereof as if it were going to court...well organized and documented. It is still time consuming...and regardless of the software, will take time to put into the possible format that be required by a legal proceeding. Never ASSUME....Always DOCUMENT....and know that if there was only one legal opinion...there would be one lawyer. Many people wish that were true.. ...different judges on any given day can make different decisions...and it may well not be the one you favor.
This has been a professional advisory post brought to you by Sally K. & David L. Hanson, Broker Associates with Keller Williams honored to be serving southeastern Wisconsin for all things real estate.