More Awards Bestowed on Rattikin Law

The law firm of Rattikin & Rattikin, LLP is excited to announce that once again, Jeff Rattikin has been honored with two presitgious awards in 2010. Jeff, an AV-rated attorney (the highest designation available in the industry), was recognized by his peers as a Top Real Estate Attorney in Fort Worth by Fort Worth, Texas Magazine, for the eighth consecutive year. In addition, Jeff has once again been selected by Texas Monthly Magazine as a Texas Super Lawyer for 2010, a designation afforded to the top 5% of lawyers in Texas. The firm is extremely grateful and appreciative of this recognition, and strives to use our expertise to offer our clients the most professional, competent and convenient services available through TexasLegalDocs.com.

Texas Inheritance Laws-Expect the Unexpected

Let’s face it. Texans are a proud breed, and we firmly believe that we hold an inalienable right to control our God-given assets even beyond the grave. But unfortunately, Texas lawmakers, in all their infinite wisdom, don’t always share this view. As a result, unless you execute a valid written will, and it is offered up for probate within four years of your death, the State of Texas decides who will inherit your property, applying a rigid set of rules and formulas outlined in the Texas statutes without regard to any pre-death intentions or promises. To be sure, this application of non-flexible guidelines often leads to the estate’s inclusion of long-lost, inadvertent and all of a sudden gleeful heirs, reveling in their good fortune, typically with their hand out for compensation to clear up their new-found property interest. For a more extensive analysis of the potential pitfalls of dying without a will, be sure to read this author’s article at: http://www.texaslegaldocs.com/blog/default.aspx/When-Mama-Dies–the-Turf-War-Begins–Who-Takes-Title-to-the-Family-Farm”>http://www.texaslegaldocs.com/blog/default.aspx/When-Mama-Dies–the-Turf-War-Begins–Who-Takes-Title-to-the-Family-Farm.

So who does inherit a decedent’s property if no will had been executed prior to death, or none found after death? The Texas formula for determining heirship is as complicated as the intertwined lives of its citizens. But regardless of its complexity, everyone has some sort of legal heir to their assets immediately upon death; it may just be a person who would be quite surprising. The statutory formula takes into consideration whether the property owned by the decedent at the time of their death is community or separate, whether the decedent is married or single, and whether and to whom children are born.

Everyone assumes that if a married Texan dies without a will, their property would be automatically inherited by their spouse. However, prior to September 1993, that just was not the case. Until that time, if any children were born to the decedent, the spouse would not inherit any of the decedent’s interest in the assets. But after September, 1993, the law was revised to its current configuration.

Today, if a married Texan dies, all of his or her interest in community property will pass by law to their surviving spouse. But there is always an exception to every rule. If the decedent had any children born to a person other than the surviving spouse (from a prior or illegitimate relationship, for example), all of the decedent’s half interest in the property will pass to the children or the children’s heirs, and not to the surviving spouse! This of course, leads to the frequent and uncomfortable situation where the children of the decedent now co-own property and assets with their step-parent. To say some past grudges and emotions bubble up and get aired out in these situations would be an understatement. Lesson learned: If you are considering getting remarried, and you have children from another relationship, by all means get a will drafted!

An even harsher result occurs in the treatment of separate property of the decedent, not co-owned by the surviving spouse. In this situation, all of decedent’s interest in real estate passes directly to his or her children (regardless of parentage), with the surviving spouse granted only a life-estate in those assets. Non-real estate assets are divided 2/3 to the children and 1/3 to the surviving spouse. If the decedent had no children, the spouse gets ½ of the separate property, and the other half is divided among the decedent’s surviving parents, and possibly siblings. Again, the formula gets complicated, and leads to some “interesting” co-ownership scenarios.

An unmarried decedent’s property will go to his or her children, if there are any, and if not, to his parents. If no parents survive, then the property will pass to the siblings and their descendants.
In cases where there are no spouse, no children, no parents, no siblings and no descendants of a predeceasing spouse, child, parent or sibling, then it gets even more twisted, bringing into play the paternal and maternal kindred of grandparents, aunts, uncles, cousins and the like.

All because a person fails to obtain and execute a last will and testament prior to death. In short, all Texans should do themselves, and their families, a huge favor by spending a few hundred dollars on a valid and enforceable will, drafted by a competent and experienced attorney who can avoid the numerous pitfalls associated with self-help, fill-in-the-blank generic forms and handwritten wills scratched on the back of a cocktail napkin. Your long-lost unknown cousin who dropped out of society in the 60’s may be left in the cold as a result of your will, but at least you can have the final say in the ownership of that God-given piece of Texas that you have been blessed with. For more information on obtaining a last will and testament, please visit http://www.texaslegaldocs.com/docs/wills/.

Clarification/Update of Texas SAFE Act

This just in from the TLTA Office of Government Affairs:
Doug Foster, Commissioner of the Texas Department of Savings and Mortgage Lending, has written that the Department will continue to allow the statutory seller finance de minimis exception, which has long been allowed under Texas statute but had been placed in doubt since the recent passage of the Texas SAFE Act.

The federal SAFE Act requires all mortgage loan originators to be licensed in each state. During the 81st Legislative Session the legislature passed the Texas version of this requirement. Since the passage of the new law, the status of the de minimis exemption, which allows for a limited number of transactions each year, has been in question. The exception says that no license is required to seller finance transactions of five or less in a 12-month period.

“The Department has spoken with numerous citizens directly and staff members from the offices of 13 legislators whose constituents are economically impacted by the loss of a de minimis exemption from licensure,” Foster writes in the notice. “Seller financing in part or in whole has historically been an important part of facilitating real estate sales transactions. To depart from long standing Texas de minimis tradition in the midst of the current credit restrictions and a market where sellers are having difficulty selling homes would run counter to the efforts of stabilizing the housing market and reviving the economy.”

U.S. Rep. Barney Frank, Chair of the House Committee on Financial Services and U.S. Rep. Spencer Bachus, a ranking member of the same committee, were the primary authors of the federal SAFE Act. In a letter dated July 22, the members stated they, “think it is permissible for States to consider a de minimis standard for registration and licensing requirements under the act…”

The Department will continue to allow the exception unless there is a subsequent statutory amendment adopted or if HUD determines that no seller financing de minimis exception is appropriate under the SAFE Act.

As we previously reported, legislation will also likely be filed during the 82nd Texas Legislative Session to add the five or less exemption to statute. The statute is already in existence in Chapter 156, Finance Code, but may be added to Chapter 180, SAFE Act.

TLTA will continue to monitor this issue and provide updates if there are any new developments. If you have any questions, please contact Aaron Day, TLTA Director of Government Affairs and Counsel at 512.472.6593.

Deeds in Texas: Does it Matter What Type Is Used?

One of the most puzzling issues confronting Texas consumers when attempting to document a real estate transfer is deciding which type of transfer deed is appropriate to use. For generations, well-meaning advisors have unknowlingly led their questioners astray by repeating a well-circulated but extremely inaccurate mantra: In order to transfer title to real estate, the seller should give the buyer a quitclaim deed, often mispronounced a quickclaim or quick claim deed. On innumerable occasions, consumers have contacted my office asking for such a document, claiming that the county clerk’s office at the courthouse advised them to utilize this document. And the bad advice is not limited to just the non-attorney public. Many, many divorce lawyers and probate lawyers routinely subject their clients to potential title issues by including quitclaim deeds in their work product. How such misinformation and misuse has become so widespread is a mystery; however, Texas law is very clear that in most instances, a quitclaim deed is not appropriate, and could lead to future problems.

In Texas, there are basically four main types of deeds: a general warranty deed, a special warranty deed, a deed without warranty and a quitclaim deed. The differences between them are profound, and the type used continues to affect both parties well after the transfer takes place.

But back to basics. In order to validly convey title to real estate in Texas, a grantor must execute a deed to the property in front of a notary public. The deed must be presented to and accepted by the grantee, and it should be filed of record in the county clerk’s office to put the public on notice of the transfer. Failure to file the deed can subject the property to future claims by other parties.

Most commonly, a grantor provides a general warranty deed. This basic staple of Texas real estate law serves to transfer title to the grantee, and contains a full warranty of title, whereby the grantor warrants to the grantee that the title to the property is free and clear of any other claims. Obviously, such a deed, containing broad warranties of title, provides the best protecton for the grantee.

However, in certain situations, a grantor may not be comfortable in making such broad warranties to a grantee. Perhaps they are not sure about the status of title prior to their ownership, or they would rather the grantee rely on the title insurance provided by a title company to cover any past title issues. In such cases, a grantor may opt to provide only a special warranty deed. Despite the implications of its name, a special warranty deed is actually more limited than a general warranty deed, in that it warrants that title is free and clear from other claims only during the time period of the grantor’s ownership. A special warranty deed offers no protection for claims arising prior to the grantor’s ownership.

If for whatever reason a grantor is not comfortable making any warranties of title at all, a deed without warranty can be prepared. However, such a document is not advised, and a grantee would accept such a deed only as a last resort. This type of deed is typically used to clear up past title problems, such as recently found heirs in the chain of title who were not even aware of their interest in the property.

Lastly a quitclaim deed is hardly a deed at all, in that technically, it does not convey anything. Instead, it is more of a release than anything else. In executing a quitclaim deed, the signer is in effect releasing, or relinquishing, any claim of title to the transferee. This relinquishment is similar to “stepping aside”; it does not amount to an actual conveyance or transfer of title at all. For this reason, most title companies will not give credence to quitclaim deeds found in a chain of title, and corrective action must be taken before a property sale can be closed.

A person desiring to take title to property is well advised to avoid the oft-recommended “quick-claim” deed, and demand instead an actual warranty deed from the grantor. This, coupled with a title insurance policy issued by a reputable title company who has performed a complete search of the property’s title records, provides a grantee the most security, facilitating many happy years of real estate ownership.

Copyright 2010 Jeffrey A. Rattikin, all rights reserved

The New SAFE Act: The Death of Seller-Financing in Texas?

By: Jeffrey A. Rattikin
Attorney at Law

A recent law passed by the Texas Legislature has quietly hit the books, one that promises to have a significant and adverse effect on Texas consumers’ ability to obtain financing for the purchase of residential property. The legislation serves to place further limitations on a prospective purchaser’s financing options, at a time when the current negative banking environment already has severely restricted the viability of real estate transactions.

Called the Texas SAFE Act, the new law requires individuals who offer to finance a residential purchase, either as a third party lender or through seller-financing, to be licensed as a mortgage loan originator. What this means is that an individual is now prohibited from fronting the money for an acquaintance to purchase residential property, or offering seller-financing to a potential purchaser of his/her own property. What, you say? This can’t be true, not here in Texas!

Unfortunately, it is true. The law passed in 2009, in part as a result of a directive placed on the states from the current administration in Washington, D.C. As of April 2010, the Texas Department of Mortgage Lending has announced its intention to commence enforcement activity to crack down on the perceived dangers of obtaining financing from an unlicensed person. There are only two exceptions, or exemptions, to the law: First, the law doesn’t apply if you are offering seller-financing on the home in which you have actually resided. Second, the law doesn’t apply to persons who offer financing to others in a “direct familial relationship”. For all other residential transactions, a person is prhibited from offering financing or seller-financing, even on a one-time, single transaction. Selling your beach-house or a rental unit? You better hope that your buyer can qualify for bank financing.

It remains to be seen how this new law will be enforced, or whether due to public outcry, its scope may be narrowed in the future. But for now, the SAFE Act is extremely broad and far-reaching, and seemingly further hampers consumers’ ability to kickstart the economy in an already depressed real estate market.

Copyright 2010 Jeffrey A. Rattikin, all rights reserved

TLD Fact Sheet and Tidbits

Mission Statement: TexasLegalDocs.com provides affordable online legal documentation services to Texas consumers who might not otherwise utilize the benefit of the legal protections afforded by comprehensive enforceable agreements, due to geography, perceived costs, apprehension or mistrust of traditional methods of procuring legal services.

TexasLegalDocs.com offers Texans the ability to obtain quality Texas-specific legal documents prepared by award winning attorneys online from the comfort of their home, at a fraction of the cost of traditional law firms or other online vendors.

TLD represents an evolution in the delivery of legal products and services to everyday Texas consumers, a true marriage of technology, convenience and accuracy demanded by today’s online-oriented public.

TexasLegalDocs.com will allow Texas consumers to order, review, receive and pay for customized, comprehensive legal documents completely online, typically with one-day turnaround service.

By utilizing TexasLegalDocs.com for their legal documentation needs, Texans can avoid the time-consuming, intimidating and costly process associated with the traditional method of procuring legal services. No consultation fees, no retainer fees, no delays resulting from over-burdened attorney caseloads.

In addition to providing access to Texas-enforceable legal instruments, TexasLegalDocs.com will also feature exclusive content produced by the award-winning Rattikin & Rattikin legal team, including timely and relevant legal updates, articles, blogs and videos of interest to Texans.

The TLD Online Community will serve as an important portal to the latest information on Texas music, art, festivals and cultural events supported and sponsored statewide by TexasLegalDocs.com.

TLD customers will obtain comprehensive legal documents specifically drawn and tailored to meet the specific facts and needs of the transaction at hand.

In ordering documents from TLD, the clients’ online experience is enhanced by an abundance of helpful hints and information at their fingertips, in the form of videos, tutorials, live online help, definitions, explanations, glossaries and concise online instructions. The wide variety of available information provides the client with a full understanding of the nature of the transaction, and the confidence that the deal is being handled completely and correctly.

Clients are especially thrilled to learn that the cost of obtaining actual legal representation through TLD is less than half that charged by traditional law firms, and much less than most, if not all, of the non-lawyer online document providers who saddle unwary customers with generic “one-size fits all” multi-state forms.

TexasLegalDocs.com serves as a hub of information related to the Texas real estate industry, featuring online blogs of topical interest, newsfeeds from around the state, and an Ask-A-Lawyer portal whereby a consumer can obtain some general information about a specific legal topic. Consumers can also participate in the discussion, as a full online community allows like-minded Texans with an interest in Texas’ most prized asset, that being real estate ownership, to discuss and share their experiences.

Ensuring that the firm stays on the cutting edge of information technology, consumers can monitor and communicate with TexasLegalDocs.com through all aspects of social media, including Twitter, Facebook and LinkedIn, to name a few.

TexasLegalDocs.com offers consumers the safety of secure transactions protected by encrypted internet-based communication portals, along with the convenience of payment options including credit cards, online check and PayPal.

TexasLegalDocs.com’s clients’ needs are analyzed, documented and reviewed by board certified Texas real estate attorneys, rather than being pieced together by out—of-state customer service representatives responding only to inputs made by a sometimes uninformed consumer unsure of what they really need.

Utilizing online blank forms, computer-generated forms or store bought forms can often lead to an inaccurate, incomplete and unenforceable transaction, which will cost consumers potentially thousands in attorney’s fees and costs to undo. TexasLegalDocs offers complete, correct solutions to consumers unfamiliar with the intricacies of Texas law.

TexaslLegalDocs is not a form library, nor is it a computer-generated document service. It facilitates online access, communication and fulfillment of real estate transactional needs of consumers across the State of Texas, in our cities, towns, farms and ranches.

January 2010 TLD Press Release

Coming Spring 2010, the launch of a highly-anticipated website offering Texans the ability to obtain top-quality, Texas-specific legal documents, drafted by some of the most trusted and respected attorneys in the State, all from the comfort of their own home. TexasLegalDocs.com will allow Texas consumers to order, review, receive and pay for customized, comprehensive legal documents completely online, typically with one-day turnaround service. By utilizing TexasLegalDocs.com for their legal documentation needs, Texans can avoid the time-consuming, intimidating and costly process associated with the traditional method of procuring legal services. In addition to providing access to Texas-enforceable legal instruments, TexasLegalDocs.com will also feature exclusive content produced by the award-winning Rattikin & Rattikin legal team, including timely and relevant legal updates, articles, blogs and videos of interest to Texans. And the TLD Online Community will serve as an important portal to the latest information on Texas music, art, festivals and cultural events supported and sponsored statewide by TexasLegalDocs.com.

Principle Jeff Rattikin states “TexasLegalDocs.com represents an evolution, in fact, a revolution, in providing everyday consumers with direct, cost-effective access to quality legal products that will enhance their personal and professional lives.”

Stay tuned for TexasLegalDocs.com launch details in the months to come.

Current State of the Online Legal Services Industry

Consumers now have choices, but they better know what they’re getting into

By: Jeffrey A. Rattikin
Rattikin & Rattikin, L.L.P.
September 21, 2009

In the mind of many consumers, the legal services industry has been slow to join the party when it comes to the delivery of internet-based consumer services. In this age of instant online information and availability, consumers have come to expect that they can obtain virtually any good or service at the click of a mouse. However, lawyers across the nation, saddled with decades of tradition and a healthy respect for ethical obligations and privacy issues, have for the most part resorted to traditional means of providing legal services to their clients.

But as consumers have become increasingly confident in the effectiveness of securing goods and services online, the legal industry has been forced to increase its online visibility, and viability, in order to meet their clients’ expectations. Several different categories of online legal sites have emerged, finally bringing consumers direct access over the internet to legal products and services. However, a misunderstanding of, or sheer indifference to, the very real distinctions and nuances of each category of service could spell real trouble for an unsuspecting consumer.

As of this writing, most online legal sites fall within one of five broad categories:

1. Online Legal Form Libraries. In the last few years, a number of online legal form libraries have emerged, whose forms are available for direct download and use by the consumer. Such sites typically offer blank form templates for use around the country, basically an online version of the self-help legal books and forms available for years at bookstores and office supply retailers. For a presumably attractive price, usually less than $50 per document, consumers can avoid the perceived high cost, delay and intimidation of lawyer assistance by obtaining forms and filling in the blanks themselves. However, the difficulties and dangers associated with attempting to solve sometimes complex legal issues without a full understanding of the transaction at hand could pose significant risk to the consumer. If a transaction is incorrectly or incompletely documented, the consumer may be faced with an extremely expensive process of untangling a botched or unenforceable transaction. The fact is that most consumers seeking to obtain online legal services probably do not have a full understanding of the legal documents needed to effectively address their situation. With no proper legal assistance at their disposal, a consumer is left on their own to guess as to the documents to use, the proper way to complete and execute the documents, and the follow up steps (filing of record, etc.) necessary to ensure the enforceability of the transaction. While possibly saving some money by utilizing these online form libraries, the consumer is often left lacking a comprehensive solution to their needs. In its place are inaccurate, incomplete and unenforceable agreements that can further muddy the consumer’s legal situation.
2. Computer-Generated Document Providers. One of the most significant developments in the field of online legal services has been the advent of the availability of computer-generated legal products developed for use without attorney involvement. This category of service is similar to the legal form library sites, but instead of blank form templates, the computerized document sites provide consumers with a somewhat customized agreement with all blanks filled in, based on the information provided by the consumer through an online questionnaire. Just like the legal form libraries, most computerized document sites force a consumer to make their own determination as to which documents they may need in a given situation, without any input from a lawyer. These sites justify their legality by claiming that they are not practicing law; rather, they are merely providing forms, with the added convenience of filling in the blanks for the consumer based on the consumer’s own input. Some sites offer “technicians” who may be available for online questions, but these computer technicians have no legal training, are not overseen by real attorneys and can only address website functioning questions, rather than questions of law. The “technicians” are typically based in a call center out of state and sometimes even out of the country. They have no ability to offer, and are in fact prohibited from offering, competent advice and answers to questions involving the legal intricacies of all 50 states in which these sites attempt to market. Again, a consumer uninformed as to the specific nuances of the law in their own state may subject themselves to a significant and adverse result due to the unenforceability of their attempted solution. Lastly, although a few of these sites claim to be associated with and supported by law firms, it is clear that the named law firm does not and cannot render legal advice to the consumer, and they certainly lack adequate knowledge of the technicalities of the law in all 50 states.

3. Virtual Law Firms. A very disturbing new form of online legal services has recently been introduced, an enhanced offshoot of the computer-generated document sites. Being dubbed as “Virtual Law Firms”, these services are typically no more than backroom computerized form generators, producing legal documents generated by computer based on the consumer’s own input on online questionnaires. Under this model, these enhanced form generators actively court actual attorneys to put up a website and offer online legal documents for their clients. From the consumer’s perspective, it appears that they are obtaining actual legal services provided by the attorney whose website is accessed. In actuality, the lawyer owning the website is providing no input, counsel, advice or services at all. Their website is merely a virtual portal to a computerized form generator, who has agreed to provide forms to the attorney’s clients as part of a subscription agreement. The form generator, who may be based out of state or out of country, provides 100% of the communication, document assembly, security, storage, backup and other functions, all under the website banner of the attorney. The leader in this emerging market even advertises to prospective attorneys that they can earn legal fees while they sleep The consumer, however, is left with the daunting task of deciding what forms they may need to effectively address a legal concern. While the virtual attorney sleeps, the consumer can only rely on the assistance of an out of state or offshore computer “technician,” who must provide customer service for legal needs in 50 different states, all with their own rules, regulations, and nuances. The idea of a Virtual Law Firm, with no direct input or interaction between a licensed attorney and their client, is at the very least disturbing, potentially deceptive to the consumer and most certainly skirts on the ethical obligations of attorneys to zealously represent their clients. A wise consumer would be encouraged to peel back a few layers of the online law firm to unveil the true nature and source of the product or service being purchased.

4. Virtual Paralegals. A few sites have sprung up which advocate the use of “personal legal services” performed online by a virtual paralegal, who offers to prepare basic documents without attorney supervision. The very evident risk in relying on a non-licensed, part-time provider with no attorney oversight and no malpractice insurance clearly would suggest that a wise consumer think twice about utilizing such service for their legal needs. In many states, this type of service will most probably not pass legal muster when challenged as the practice of law without a license.

5. E-Lawyering. While the terms associated with online legal services are still evolving, as is the industry itself, the concept of real lawyers providing actual legal services for clients utilizing an online web interface is being loosely referred to as e-lawyering. Even in this category, there are many different levels of implementation; however, the element that binds these services together is that an attorney, licensed to practice law in the state in which the services are to be performed, is providing actual legal services to the client, utilizing all of his or her experience, skill and analysis in zealously representing the interests of the client.

At its most basic, an e-lawyer platform consists of a static website, acting as a digital brochure and providing clients with information about the firm. Sometimes, the firm is savvy enough to include articles and updates on legal topics of interest to its clients.

A few lawyers have taken the static website one step further, by attracting clients through online communities, blogs, and social media portals such as LinkedIn, Twitter, Facebook and LexBlog. By providing news, information and opinions to the public through these new online channels, the e-lawyer can increase the visibility, client-awareness and perceived expertise of his or her practice.

However, the state of the art in e-lawyering combines the elements of all of the categories listed above. A lawyer who most successfully integrates the power of the internet in fully representing the interests of his or her client will have a significant advantage over traditional firms and other online efforts as the online legal services industry continues to evolve. By utilizing a web interface platform, the e-lawyer provides its clients with all the benefits, convenience, and efficiencies which arise from e-commerce applications, while at the same time crafting a customized solution to the clients’ needs.

There are just a handful of lawyers across the nation who have fully integrated e-lawyer principles into their practice. Perhaps the best example of using the power of the internet to provide online legal services to consumers can be found at www.TexasLegalDocs.com, a site offering Texans across the state the ability to obtain top-quality, Texas-specific legal documents, drafted by some of the most trusted and respected attorneys in the State, all from the comfort of their own home. By communicating, ordering, reviewing, receiving and paying for legal documents completely online, TLD clients avoid time-consuming, intimidating and costly law office visits, retainer fees, consultation fees and the like. They do, however, receive comprehensive legal documents specifically drawn by award-winning attorneys to meet the specific facts and needs of the transaction at hand. In ordering documents from TLD, the clients’ online experience is enhanced by an abundance of helpful hints and information at their fingertips, in the form of videos, tutorials, live online help, definitions, explanations, glossaries and concise online instructions. The wide variety of available information provides the client with a full understanding of the nature of the transaction, and the confidence that the deal is being handled completely and correctly. Moreover, clients are especially thrilled to learn that the cost of obtaining actual legal representation through TLD is less than half that charged by traditional law firms, and much less than most, if not all, of the non-lawyer online document providers who saddle unwary customers with generic “one-size fits all” multistate forms.

More than just a document site, www.TexasLegalDocs.com enhances its level of expertise by providing Texas consumers with a one-stop hub of information related to Texas real estate. Not only will the consumer have access to custom comprehensive solutions to their legal needs, but they will also be able to view the latest in Texas real estate trends through online blogs of topical interest, newsfeeds from around the state, and an Ask-A-Lawyer portal whereby a consumer can obtain some general information about a specific legal topic. Consumers can also participate in the discussion, as a full online community allows like-minded Texans with an interest in Texas’ most prized asset, that being real estate ownership, to discuss and share their experiences. And to be sure the firm stays on the cutting edge of information technology, consumers can monitor and communicate with the firm through all aspects of social media, including Twitter, Facebook and LinkedIn, to name a few.

Online legal services continue to evolve, but it appears that for Texans, at least, the future of legal representation is indeed a mouse click away.

Who Pays the Title Insurance Premium? Is State Regulation Really Necessary?

By: Jeffrey A. Rattikin
rattikin@rattikinlaw.com
www.rattikinlaw.com
October 12, 2009

So, it appears that the State of California has once again reverted to the age-old practice of resolving readily negotiated contract issues by ramming down more government regulation. An issue as easy as deciding what title company should handle the closing of a real estate transaction is now dictated by legislation, rather than free market choice.

Aimed at preventing banks from dictating the escrow and title services used in bank-owned (REO) property transactions, California’s Assembly Bill 957 was approved and immediately implemented last month, dubbed the Buyer’s Choice Act. According to Inman News, the bill provides that sellers of one- to four-family homes are barred from requiring a buyer to purchase a particular title insurer or escrow provider as a condition of selling the property.

As a result, the banks, who need to rely on the experience of the title closer when handling a specialized transaction such as an REO sale, are forced to take their transaction to any number of buyer-suggested title companies, who may have limited experience in REO’s, and may even be located out of state. It is evident that the inefficiencies resulting from the inevitable learning curve and offsite communication breakdowns will lead directly to delays, excess costs and quite often lost transactions.

In Texas, the choice of a title company is freely negotiated between the parties. Traditionally, the seller pays for the title policy, due primarily to the seller’s contractual obligation to pass good title to the purchaser. Since the seller pays for the policy, it makes sense that the seller should be able to choose the provider. It is the buyer, however, that will be the beneficiary of the title policy, and they have every reason to demand that the title insurance be closed and backed by a reputable and trustworthy company. Both sides desire and expect a smooth and professional closing experince, and both sides hold reasonable arguments for their ability to choose. But the reality is, no party to the transaction wants to lose the deal over an argument as to what company shall act as closing agent. At some point, sellers and buyers are able to reach a mutual decision on an acceptable title company without tanking the deal.

Some real estate practiioners are under the mistaken belief that federal law prohibits a seller from requiring a buyer to close at a certain title company, citing a portion of the Real Estate Settlement and Procedures Act. The Act provides, in part, as follows:

(a) No seller of property that will be purchased with the assistance of a federally related mortgage loan shall require directly or indirectly, as a condition to selling the property, that title insurance covering the property be purchased by the buyer from any particular title company.
(b) Any seller who violates the provisions of subsection (a) shall be liable to the buyer in an amount euqal to three times all charges made for such title insurance

A close reading of the statute reflects that the seller is prohibited from requiring a partiucalr title company only if a) a federally backed loan is used, and b) the buyer is required to pay for the policy. As is the custom in Texas, if the seller pays the title policy premium, the statutory prohibition would not apply, and the seller could direct the closing in its discretion.

In this day and age of ever-increasing governmental bureaucracy and red tape, yet another regulation aimed at controlling routine contractual negotiations represents an unneeded and unwanted intrustion on the private property rigths of citizens. Our officials need to direct their efforts on the more pressing issues of our time.

The TexasLegalDocs.com Story

www.TexasLegalDocs.com, is a new website offering Texans across the state the ability to obtain top-quality, Texas-specific legal documents, drafted by some of the most trusted and respected attorneys in the State, all from the comfort of their own home. By communicating, ordering, reviewing, receiving and paying for legal documents completely online, TLD clients avoid time-consuming, intimidating and costly law office visits, retainer fees, consultation fees and the like. They do, however, receive comprehensive legal documents specifically drawn by award-winning attorneys to meet the specific facts and needs of the transaction at hand. In ordering documents from TLD, the clients’ online experience is enhanced by an abundance of helpful hints and information at their fingertips, in the form of videos, tutorials, live online help, definitions, explanations, glossaries and concise online instructions. The wide variety of available information provides the client with a full understanding of the nature of the transaction, and the confidence that the deal is being handled completely and correctly. Moreover, clients are especially thrilled to learn that the cost of obtaining actual legal representation through TLD is less than half that charged by traditional law firms, and much less than most, if not all, of the non-lawyer online document providers who saddle unwary customers with generic “one-size fits all” multistate forms.

More than just a document site, www.TexasLegalDocs.com enhances its level of expertise by providing Texas consumers with a one-stop hub of information related to Texas real estate. Not only will the consumer have access to custom comprehensive solutions to their legal needs, but they will also be able to view the latest in Texas real estate trends through online blogs of topical interest, newsfeeds from around the state, and an Ask-A-Lawyer portal whereby a consumer can obtain some general information about a specific legal topic. Consumers can also participate in the discussion, as a full online community allows like-minded Texans with an interest in Texas’ most prized asset, that being real estate ownership, to discuss and share their experiences. And to be sure the firm stays on the cutting edge of information technology, consumers can monitor and communicate with the firm through all aspects of social media, including Twitter, Facebook and LinkedIn, to name a few.
TexasLegalDocs.com offers you the following benefits:
1.Complete solutions to your legal needs;
2. Accurate, professional documents, unlike form libraries which require you to pick the forms you need and fill in blanks with little or no instruction or understanding;
3. Texas-specific documents, fully valid and enforceable in Texas, unlike the generic, multi-state forms available on other online law form libraries or computer-generated websites;
4. Informative, helpful website, with tutorials, instructions and videos explaining what you need to know in entering a particular legal transaction;
2. 24/7 access to your documents;
3. Convenient ordering and communication online from your own home;
4. Convenient payment options, including credit card, online check and PayPal.
5. Efficient one-day turnaround of your documents, delivered to your computer via a secure online connection;
6. Consumer-friendly pricing that beats both the online market as well as the traditional law firms, without retainers, consultation fees or exorbitant overhead charges.

Copyright 2009 Jeffrey A. Rattikin, all rights reserved