An Experiment: Is ChatGPT sufficiently sophisticated to draft legal property agreements? - Boodle Hatfield

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03 Mar 2023

An Experiment: Is ChatGPT sufficiently sophisticated to draft legal property agreements?

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4 min read

Spoiler alert, not yet!

I asked ChatGPT to draft a rent deposit for £50,000. In return, it produced what, to the untrained eye, looked like a comprehensive solicitor drafted agreement. In my initial request, I had not told ChatGPT the names of the landlord, tenant and the address of the property. So, I revised my question to ChatGPT so as to include these details adopting some rather commonly used names. Once again, ChatGPT returned a document which, at first glance, looked familiar; albeit that the precedent adapted by ChatGPT was entirely different to the first.

This puzzled me somewhat, why was it producing different documents? I asked my new AI friend for information about its sources. It said that these included a vast collection of texts, articles, books and other documents available on the internet, that have been processed and analysed by its training algorithms. This means it is likely drawing upon precedents freely available on the internet, which are not necessarily reliably correct and / or could relate to a different jurisdiction / legal system. ChatGPT even noted that whilst its strives to provide accurate and reliable information, the information received should always be verified. Asked whether it is able to offer legal advice, the chatbot notes that it is not qualified to do so and a professional's advice must be sought. 

So, were either rent deposit deeds correct? Whilst they both looked the part, there were several fundamental issues. As an example, both rent deposits provided for monies to be paid over to the landlord, with no suggestion that they continued to belong to the tenant. It is a generally accepted principle that rent deposits are held by the landlord, but continue to belong to the tenant and the landlord has a charge over the rent deposit. The rationale being, that if the landlord becomes insolvent, the rent deposit monies are not available to the landlord's creditors. As such, adopting the ChatGPT drafted document, could have catastrophic consequences to the tenant in the event of the landlord's insolvency.

Other issues in the rent deposit, included an inability on the tenant's part to have the rent deposit returned on an assignment. This is the market standard position, as the incoming tenant will likely be asked to provide a new rent deposit. In addition, there were no provisions requiring the tenant to top-up the rent deposit should the landlord draw down on the rent deposit in consequence of the tenant's default; again an industry standard and important provision which has failed to make it into either of ChatGPT's precedents.

Had the precedents been correct could we have used them? Despite being warned that ChatGPT cannot provide legal advice, when asked for the copyright position in relation to a document it produces, the AI assistance responded that it does not own any copyright to the documents it produces. Instead, ChatGPT states that the copyright for a document produced by ChatGPT belongs to the user who inputs the text and provides the prompt to generate the content. But, is this in fact correct? ChatGPT is utilising information from a variety of sources, which in turn could be copyrighted and therein lies the danger. In using a precedent generated by ChatGPT, there might be a risk that you are causing a breach in copyright. In addition, if you are using ChatGPT for commercial purposes, the chatbot states you might need a licence from Open AI or the relevant licence holders to do so.   

On that basis, ChatGPT has some way to go before it replaces the property solicitor. Although, as it gets more sophisticated and learns which of its sources are reliable, particularly if it has access to PLC's database of legal precedents, then it may be able to put together a very good first draft of a legal document. Property solicitors will still be required to negotiate agreements and to advice clients as to the wider implications of an agreement to a client taking in consideration their particular circumstances. In conclusion, I am not yet replaceable!

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