Making the Case for Attorneys Serving as Title Insurance Agent and Closing Agent2921427

As an attorney focusing on transactions and litigation involving real estate in Florida, a large part of my practice deals with closing sales transactions and insuring title to real property. I'm often surprised that many of the other real estate professionals I work with (sale associates, brokers, third party vendors, etc.) are not aware that I or my firm actually review and insure title and provide escrow services in addition to our other efforts to negotiate and prepare contracts and otherwise facilitate transactions.

Though many other states actually require that an attorney close real estate transactions and insure title, Florida does not. In Florida, a licensed title insurance company may hold and disburse escrowed funds, prepare and record conveyance documents, and issue title insurance at closing. Though many title insurance companies do a fine job, here are a few thoughts to ponder as you assign the closing/title insurance agent in your next real estate transaction:

1. Premium Amounts: Title insurance premiums are based on a promulgated rate set by the legislature of Florida and codified in statute. This means that the premium amounts are set by law and cannot be deviated from regardless of whether an attorney issues the policy or a title company does. In short, your premium amount is the same whether an attorney issues it or a licensed title agent does;

2. Legal Counsel: Title insurance companies are not normally staffed by attorneys. Consequently, they are not able to provide legal advice and are oftentimes restricted by their underwriters in their ability to prepare legal instruments necessary for closing; and

3. Discretionary Settlement Fees: Since the title insurance premium is set by statute, the only discretionary costs levied by the closing/title agent are its settlement fees. Many people are surprised to learn that attorneys acting as closing/title agents often charge the same amount or less than title companies for settlement fees.

4. Qualifications. The requirements for licensure as a title insurance agent are: 1) applicant must be 18 years or older; 2) applicant must be a resident of the state of Florida; 3) applicant must complete a 40 hour course on title insurance or serve in a role responsible for title insurance duties at a title insurance agency for at least one year; and 4) applicant must pass a state exam and pays application fees. On the other had, an attorney issuing title insurance will have obtained at least a Bachelor's degree, engaged in 3 years of study at law school, passed the state Bar exam, and will have undergone training by the underwriter through which he/she issues title insurance policies. The purchase and sale of real estate often represents the single largest transaction in a person's lifetime. The transaction involves many legal issues which warrant, and in many cases require, the involvement of an attorney. Attorneys fees for settlement services, including issuance of title insurance, are often comparable or in some cases less than that of non-attorney title insurance companies. So the question is, why would you NOT use an attorney for your next closing?

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