A Title Company is NOT a Real Estate Lawyer

A Title Company is NOT a Real Estate Lawyer

Dion DePaoliPro Member
Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes

I just want to point this out. Lately I have seen folks referring situations to title companies instead of properly referring to a real estate attorney. It is important to know what the difference is and it is important to seek out the proper party.

I always like to say, everyone has an answer only some of the folks have the right one.

You wouldn't ask a landscape guy to do your plumbing would you? He might know something about it, but it is just not the same. The same goes for title companies and RE attorney's.

Nothing against title agents at all. Those who are good at what they do are good at what they do. Through the course of their career they may come into many situations where they have had to divert to an attorney giving them knowledge of a topic. Additionally, some title companies are attorney owned which is a good mix of both worlds and aides in the education of a title agent.

Good RE attorney's have litigation experience and multiple years of practice. A title agent can not gain that litigation experience. Also, there is a line between giving legal advice and being a title agent by the mention of some of the posts I have read that line seems to get crossed often.

I have seen it recommended that title companies help draw up contracts along with notes and mortgages or deeds of trust. IMO, that is wacky. Those items are all potential litigation topics and you are best served by an attorney in all states.

Lastly, RE attorney's really are not all that expensive. An attorney can only charge for his or her time. How long does it take to draw up what ever it is you are looking for? A couple hours so a couple hundred bucks. That extra money can make a real difference when the documents get scrutinized. BTW, a title company can not claim the creation of a contract under Errors and Omissions, so good luck recouping any failed interactions.

Any folks have horror stories from their tenure related to the topic? Feel free to share.

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  • Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    14y

    In many large title plants you'llfind more specialization as Dion points out. My experience is that each title company, if not onwed by an attorney, has an attorney on retainer for title issues they can work through when needed. These attorneys are bonded insured agents with the title company, if they do anything outside those title duties, as Dion mentioned, they fall back to their state bar requirements and the bond and insurance they carry for the practice of law.

    Either or, in many cases there may not be much difference, depends on their experience and local customs. When a title claim is made against a title insurer you'll usually end up with an RE type who has experience in title matters as the title plant attorney will not be representing you, but defending the claim. There are many cross over issues IMO and the choice of an attorney should be based on the situation and their experience in similar issues, not so much as to being in a title plant or in an office off the street.

    In the preperation of notes by a title plant attorney, they are not acting in the title insurance capacity, they are then acting in an attorney/client arena, they can do so and they are held to the standards that any off the street attorney would be.

    I have used both, I have also had to fix things originated by both and after discussions with several attorneys, they decided not to do seller financed transactions any longer when they learned of the financial aspects of structuring a deal. 40 years ago, just about any attorney might use a half page boilerplate note, most know better now. Frankly, seems title companies were the worst offenders in the preperation of poorly written notes and lack of due diligence.

    Actually, it's much better to find an attorny who represents banks, someone familiar with financing issues rather than a RE attorney. The only aspect of RE law with a note is the perfection of the lien, there are many more issues related with the financial aspects than filing a deed of trust.

  • Rental Property Investor · PA · Member since 2012 · 9 posts · 0 votes
    12y

    Thank you for posting. Just the info. I needed today. :-)

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