What an Attorney Does That a Title Company Doesn’t

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By Gary M. Landau, Esq.

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What Attorney Does That Title Company Doesn’t? | Coral Springs, FL | Call (954) 979-6566

attorney vs title companyYou’re about to purchase a new home or sell your old one, and you wonder whether you need an attorney or can “get away” using only a title company (as your Realtor may tell you). For little to no extra cost and much peace of mind, using an attorney to handle your closing usually makes a lot more sense.

For most people, the home is the most expensive asset you own. If you were buying or selling a business for the same price, you wouldn’t think twice about hiring an attorney. In real estate transactions, it makes even more sense to bring in a lawyer because in many cases the title company’s fee may not be any lower.

What you get when you hire an attorney over a title company is someone who not only handles the paperwork for your closing, but who also looks out for your legal interests. A title problem pops up during the process? An attorney can quickly clear it up. Get into a dispute about what furniture the seller is supposed to leave behind? An attorney can interpret the contract to see what you’re entitled to, then help you enforce your rights. See charges on your closing disclosure form you wonder about? An attorney carefully evaluates all charges to make sure you are legally bound to pay them—important because people often try to slip in extra fees hoping you won’t notice.

If you are buying a house in Coral Springs or selling one in Palm Beach County (the customs differ), you are generally the one who chooses the title insurance provider/closing agent. If you select an attorney, you get legal representation for a price similar to a title company’s, which doesn’t come with that representation. Attorneys also tend to be more thorough; I have been involved in many deals where the title company doesn’t do a complete city lien search, for example, claiming that is outside the scope of their job. This means if the home has outstanding permits, you may not know it until after you close.

What’s more, I have saved clients hundreds or thousands of dollars because I contested charges they did not legally have to pay. So even if the other side chose the closing agent and they hired me additionally, the savings often more than paid my fee.

Quick Frequently Asked Questions

1. Can a title company provide me with a legal opinion if a “cloud” is found on the title?
No. Under Florida law, a title agency is generally prohibited from providing legal advice or a legal opinion regarding the status of a title. If a Cloud on Title (such as an unreleased mortgage from a previous owner) is discovered, a title company can only identify the issue as an “exception” to the insurance policy. They cannot legally advise you on how to resolve it or draft the legal documents (like a Quiet Title action or a corrective deed) needed to “cure” the defect. Only a licensed Florida attorney can perform these services.

2. Are title insurance rates negotiable in Florida?
The premium for title insurance is actually promulgated (set) by the state of Florida under Florida Administrative Code 69O-186.003. This means the base cost of the title insurance policy itself is the same whether you use a title company or an attorney. The difference in cost usually lies in the “settlement fee” or “closing fee,” which is the charge for the labor of conducting the closing. Because the insurance rates are fixed by law, hiring an attorney often costs virtually the same as a title company while providing the added benefit of legal representation.

3. What is the legal risk of a title company failing to perform a “Municipal Lien Search”?
While a standard title search looks at county records for mortgages and taxes, a Municipal Lien Search investigates unrecorded city issues like utility bills, code enforcement violations, and open building permits. If a title company excludes this from their scope of work, you could inherit thousands of dollars in fines that “stay with the land” after closing. An attorney acting as your closing agent has a Fiduciary Duty to ensure your interest is protected, which typically includes ensuring these municipal issues are resolved before you take ownership.

4. If I am the Personal Representative of a probate estate, can a title company help me with the “Order to Sell”?
No. If you are selling a home that is currently in Probate, a title company cannot draft the Petition for Order Authorizing Sale or the resulting court order required to transfer the property. Because these are court filings, they must be prepared by a licensed attorney. A title company will simply stop the closing and tell you to “go hire a lawyer” to get the order, which can cause significant delays and may jeopardize your sale contract.

5. Who is legally responsible for the “Gap Period” between the title search and the recording of the deed?
The “Gap Period” is the time between the effective date of the title commitment and the moment your deed is recorded in the public records. If a new lien is filed against the seller during this window, it could attach to your new home. While title insurance can cover this, a real estate attorney provides an extra layer of protection by reviewing the Gap Affidavit and ensuring the seller provides proper indemnification, a process that involves legal interpretations a non-attorney title agent cannot offer.

In the state of Florida, the convention is to present an offer in the form of a signed contract. Here again, involving an attorney makes smart business sense. For a client that plans to hire a lawyer as their closing agent, many attorneys will review the initial contract for no extra fee. To keep that contract from being binding before the lawyer sees it, be sure to write “subject to attorney’s review within three business days” into the contract you are presenting as your offer. Then get it to an attorney right away, so he or she can be sure you are well protected.

Contact the Law Office of Gary M. Landau for a free estimate the next time you find yourself buying or selling your home.

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Frequently Asked Questions

A will is the simplest way to ensure that your funds, property and personal things will be distributed after your death the way you want them to. Even if you have very few assets, you will benefit from having a will. About half of all Americans die without a will (known in legal terminology as dying intestate). Without a will to indicate your wishes, the court steps in and distributes your property according to state law. A will ensures that your assets will be given to family members or other beneficiaries you designate.

 

Having a will is doubly important if you have young children. One section of the will allows you to designate a guardian for them in the event of your death. Without a will, the court will appoint a guardian for your children, who may not be the person you desire.

Many Florida residents have out-of-state wills, drawn up while they were still living among the hills of North Carolina or the hubbub of New York. If the will was valid according to your old state’s laws at the time you made it, it is still legal in Florida. However, if you are a Florida resident, you may benefit greatly by having a new will drawn up in Florida, because it will likely be more easily admitted to probate.

 

It is important to know that each state has its own requirements for what makes a will a legally binding document. For example, Florida doesn’t recognize handwritten wills that haven’t been witnessed (known as “holographic wills”), or oral wills not put into writing, even if other states okay them. There’s also the matter of Florida estate law. In this state, for example, your surviving spouse is entitled to 30 percent of your net probate estate, regardless of what you say in your will. The spouse may also have a “Homestead” interest in property you share here, even if you want your house to go to someone else. In fact, all real property owned in Florida will be subject to this state’s laws, even if you’re a snowbird maintaining a residence in the state where your will was drawn up. Other peculiarities also exist, which is why a Florida will could make things much easier for your heirs.

 

If you would like to have me review your current out-of-state will, I am happy to do so without charge. If it turns out to be in accordance with Florida state laws and procedures, you can continue to rely on it. If not, however, your heirs would rather you discover that now.

It is a good idea to re-read your will every few years to be sure it reflects up-to-date realities (you may not want to leave your heirloom to a niece you are no longer speaking to, nor have someone be named your child’s guardian if they have taken seriously ill since you drafted your will). It is especially important to reexamine your will if:

 

  • You have gotten married since it was last drafted;
  • You have made bequests to people who have fallen out of your favor or are no longer living (I recently updated the will of a man who had left everything to his first wife, who was long deceased), or you have not included people who are now dear to you;
  • You would like to change the person named as the personal representative of the estate. (Note: Florida law does not allow a nonresident of the state to serve in this position, unless it is an immediate family member or certain other relatives);
  • You have acquired pricey or sentimental items that are not accounted for in your will. Do note, though, that Florida law allows you to attach a separate personal property memorandum to your will, detailing who will get which specific items. This list can be changed whenever you want.

Perhaps I should answer this question with where not to store it: in a bank’s safety deposit box. Although it may seem logical to put this with your other important papers, it is often difficult for your heirs to gain access to the box once you die, since the box is sealed then and must be opened in the presence of a bank employee.

 

One good option is to leave your original will with the attorney who drafted it, making copies for your personal representative and other important relatives and letting them know who has the original. For my clients who prefer that I store their original will, I keep it in a fireproof will vault in my office, or in the vault in my bank.

 

As an alternative, you could store the will in a fireproof box or vault in your own home.

 

Wherever you store it, be sure to let your personal representative and other close relatives know where you have put it!

Probate is when the court oversees your assets and liabilities after your death. During probate, the court makes sure that your will is valid and acceptable; that all debts, bills, creditor’s claims, and taxes are paid from your estate’s assets; and that your remaining assets are distributed to your beneficiaries according to your will (or, if no will exists, by Florida law).

 

Probate usually does take longer than most beneficiaries would like. But in order to ensure that everyone with a right to a claim is included in the process, the court requires several steps. If the size and complexity of your estate are minimal, however, the entire process of probate can take as little as a few months. Larger estates that are subject to IRS estate taxes or those involving litigation on the part of creditors or heirs generally take longer, often one or more years.

 

To speed the process along for simple and small estates, the courts allow a shortened form of probate, known as “summary administration,” which requires much less paperwork and time.

A personal representative (PR) is a friend or relative, or an attorney or bank, who is put in charge of the estate until all matters regarding the probate are resolved. (In other states, this person is sometimes called an executor or administrator.) The job of the PR includes identifying all assets, searching for creditors and paying valid claims, filing required estate tax returns if the estate is large enough (the figure escalates over time, according to Congressional laws), coordinating with the probate court and attorneys, and overseeing the distribution of assets–all done under the guidance and assistance of a qualified attorney.

 

Serving as a PR is an important role, and such a person should be selected with care as to who is most willing and best able to serve in this position. By Florida law, your personal representative must be over 18 years of age, and be a blood relative, your spouse, the parent or child of your spouse, or a Florida resident.

Generally, no. If you co-own all property via such legal structures as “tenancy by the entirety” or by “joint tenancy with right of survivorship” the property immediately passed to you upon your spouse’s death. Proof of death is usually all that is needed to pass such jointly owned title for cars, stocks, and other personal property to the surviving spouse.

 

But if even one asset was held solely in the deceased person’s name, or any property is owned in the form of a “tenancy in common,” that estate will be required to go through probate. If the assets are limited, the shorter, simpler form of probate is generally all that is required.
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