Travels through Property Law by Tom Brodersen, Esq.
Should I use a lawyer or title company to conduct my closing?
I frequently get calls from concerned buyers and sellers, such as a couple who were under contract to purchase an expensive waterfront home. The closing was being handled by a local title company.
The buyers felt uneasy wiring the huge amount of cash involved to them, so they asked if maybe they shouldn’t talk to a lawyer. As often happens, the title company assured them there was no need to do that.
Wisely, they ignored that advice.
They forwarded to me the scanned documents the title company had prepared.
I was struck first by the fact that the top 4 inches of each and every document was cut off! The signature lines were missing on many of the documents, including the proposed deed. There was no title insurance commitment included, nor copies of the “chain of title,” i.e., the deeds preceding the current owners title.
I was surprised at the number of misspellings in the documents. I examined the title. The sellers had created a family trust years ago, and had executed a deed transferring title to that trust. That deed included a clause reserving a life estate to that couple (giving them the right to possession until they both had died!). Strangely, the proposed deed for closing did not address the life estate, but rather transferred title subject to reservations of record. What this meant was that the buyers would not have been entitled to possession, i.e., they would have had no legal right to move into the house they were buying!
Of course, the error would have eventually been discovered (likely long after the money had passed), but the Sellers live in South America, so it would have been nearly impossible to get the deed corrected if they didn’t cooperate. That would have required a complex and very expensive lawsuit to fix.
Obviously, I could not advise my client to sign those documents. There were no less than a dozen corrections that I had to insist on.
As the number of transactions increases in this strong sellers market, we see more and more closings where the documents are riddled with errors, and closing agents too busy to call back because they will be in closings today “at 2, 2:30, 3, 3:30, 4 and 4:30!”
Just recently I talked to a closing agent that admitted the title search hadn’t actually been performed yet, even though we were scheduled to close the next day! I was shocked that could ever happen!
Too busy to do it right is too busy to trust your affairs to.
ANDERSON & BRODERSEN, P.A.,
350 Corey Avenue, St. Pete Beach, FL 33706
727-363-6100 • www.PropertyLawGroup.com