ALTA announced it has named Diane Tomb as its new chief executive officer, effective July 1.

Tomb, who has over 20 years of experience in the housing field, will leverage her deep advocacy and public policy expertise on behalf of ALTA and its members. 

"Diane is a recognized leader who understands the intersection of politics and business and the importance of informed public policy advocacy. She is the right person to lead ALTA and build on its successful legacy,” said Cynthia Durham Blair NTP, ALTA’s president. "Diane was a unanimous selection by the Board, and we expect her leadership and entrepreneurial spirit will immediately benefit our members, demonstrate our value to prospective members and continue ALTA’s tradition of strong advocacy on behalf of the land title insurance and settlement services industry."

Tomb previously served as the executive director of the National Rental Home Council. She also served as president and CEO of the National Association of Women Business Owners. Previously, she served as Assistant Secretary of Public Affairs at the Department of Housing and Urban Development during the George W. Bush administration. In 2003, Tomb founded D.C.-based public affairs and business advisory firm Tomb & Associates LLC. In addition, Tomb was a senior executive at the Fannie Mae Foundation and worked in the White House under Presidents Ronald Reagan and George H.W. Bush.

In 2017, Tomb was named one of HousingWire’s Women of Influence, a recognition awarded to the most influential women in the housing industry. She currently serves as a commissioner on the Bipartisan Policy Center’s Commission on Political Reform and on the Board of Visitors at the Fund for American Studies. Tomb is also a member of the International Women’s Forum of Washington, D.C.

“I am honored to join ALTA and look forward to leading this organization and working with the ALTA team to build upon the great success it has achieved to date,” Tomb said. “I’m also excited to work with ALTA members and all stakeholders across the title, settlement, mortgage and real estate industries to ensure we continue to protect property rights and deliver an exceptional closing experience for consumers.”

Tomb earned a Bachelor of Arts degree in political science from Mount St. Mary’s University in Emmitsburg, Md. Born and raised in Philadelphia, she now lives in Virginia with her husband and three children.

 

 

May 2019

2019 Florida Legislative Session Concludes

Last week closed out a big week for FLTA and Florida. For all intense purposes the 2019 legislative session closed out on Friday, May 3^rdand officially adjourned with approval of the $91B State budget on Saturday, May 4^th. During the past 60 plus days the association focused on several initiatives including Remote Online Notary, Public Records for Law Enforcement Personnel, closing out expired building permits, implementation of a blockchain working group and a long standing initiative of removing intra-spousal homestead doc stamps. Here are where things stand today.

Read more on the FLTA issues here.

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FLTA Lobby Days Attendees Hear from DFS

Each year FLTA hosts Lobby Daysallowing its members to come together with a unified voice to educate legislators on the title industry. This year was no different, though the event experienced one of the largest turnouts in some time.

In addition to meeting with legislators attendees also had the opportunity to ask questions and interact with Department of Financial Services representatives Matthew Guy and Ray Wenger, along with Office of Insurance Regulation's, Jeffrey Joseph. The headlining the town hall was the Unlawful Inducement and Rebate Rule. 

In gaining clarification on the use of gift cards, appropriate social media interactions and general marketing practices, much of the remaining questions revolved around when a sales or marketing team member must be licensed.

In all, the 3 hour town hall was full of information and conversation.

In next steps, FLTA is looking forward to spreading the message on suggested practices and bringing clarity to these recurring questions. This will be an ongoing initiative.

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2 Ways to Report Unlawful Inducements

See something, say something. 

FLTA has worked hard in offering feedback over the years to help amend the Unlawful Inducement and Rebate Rule and now, as an added value, representatives may submit anonymously by emailingAnonymous@FLTA.org. Through this process FLTA will remove your information and  forward your complaint directly to DFS for their consideration.

When submitting through normal channels or anonymously it is vitally important to:

• include as much information as possible;
• include specific details of events
• include photos, documents, flyers, etc.

Furthermore, when submitting a complaint anonymously it is also important to understand you willnotreceive status updates of the progress being made in your case. Of course, you may still request to be anonymous when submitting directly to DFS. Ways to submit a complaint:

Submit to FLTA Anonymously:

• Anonymous@FLTA.org

Submit directly to DFS:

• Title@MyFloridaCFO.com

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Florida Eliminates Doc Stamps for Intra-Spousal Transfers

On Wednesday, Gov. DeSantis signed into law a broad-base relief tax package that includes language spearheaded by Past President Skip Straus removing the intra-spousal tax. This has been a long standing initiative of FLTA and the association would like to thank the leadership of Rep. Yarborough (R-Jacksonville) and Sen. Stargel (R-Lakeland) for leadership in removing this burden. InHB 7123, Section 4 reads:

Section 4. Effective July 1, 2019, paragraph (b) of

subsection (7) of section 201.02, Florida Statutes, is amended to read:

201.02 Tax on deeds and other instruments relating to real

property or interests in real property.—

(7) Taxes imposed by this section do not apply to:

(b) A deed or other instrument that transfers or conveys

homestead property or any interest in homestead property between spouses, if the only consideration for the transfer or conveyance is the amount of a mortgage or other lien encumbering the homestead property at the time of the transfer or conveyance and if the deed or other instrument is recorded within 1 year after the date of the marriage. This paragraph applies to transfers or conveyances from one spouse to another, from one spouse to both spouses, or from both spouses to one spouse. For the purpose of this paragraph, the term "homestead property" has the same meaning as the term "homestead" as defined in s.192.001.

Read the full Senate Press Release outlining the tax relief package.

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Blockchain Working Group - Need Title Representative

Blockchain continues it's path of expansion with added interest in Florida this Session. Sen. Gruters (R-Sarasota) and Rep. Santiago (R-Deltona) championed this bill that will ultimately form a 13-member working group to study the impact to Florida the technology could offer once signed by the Governor.

Because of it's impact to the title industry, FLTA is pushing to have an industry representative with Blockchain expertise be a part of this group. If you, or a representative from your company is an expert and has interest, please informScott Merrittof your interest byWednesday, May 22^nd for consideration. Appointed group members will ultimately be made the Governor, CFO, Senate President and Speaker of the House.

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2020 Legislative Dates Set

The 2019 Session may have adjourned just 10 days ago, but Senate President Galvano and House Speaker Oliva have announced the 2020 legislative schedule to include:

Sept. 16-20, 2019	Committee Week 1
Oct.14-18, 2019	Committee Week2
Oct. 21-25, 2019	Committee Week 3
Nov. 4-8, 2019	Committee Week 4
Nov. 12-15, 2019	Committee Week 5
Dec. 9-13, 2019	Committee Week 6
Jan. 14, 2020	Regular Session Convenes Noon, Deadline for Filing Bills
March 3, 2020	50th day rule (Senate) Last day for regularly scheduled committee mtgs.
March 13, 2020	60th day - Last day of Regular Session

With an early session ahead of us, the Government Affairs Committee has initiated next steps by identifying some 2020 initiatives to include issues like Flat Fee Recording, a MRTA fix to the Calusa case, support the Start/Stop initiative by RPPTL, and improve the Sunbiz notifying interested parties process along with others.

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FLTA Career Center

Last month the Succession Planning Sub-Committee of FLTA's Education Committee set out to help identify the needs or gaps within the future hiring of the industry. While the results were fairly telling it appears their are areas of "opportunity" for future growth.

Are you hiring?UseFLTA's career center supported by Indeed to find your next recruit.

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Register for Upcoming Events

Upcoming Webinars to Save the Date:

June 6: Ethics for Leadership in Title Companies

Lunch and Learn

June 13 - PACE in West Palm Beach with Ygrene

Annual Convention

Save the Date - November 11-13, 2019

St. Petersburg, Florida

  

Broad-Based Tax Relief Package Signed Into Law

Back-To-School Sales Tax Holiday, Lower Business Rent Tax, Tax Relief for Hurricane Preparation and Recovery

Tallahassee–Senate President Bill Galvano (R-Bradenton) today offered the following comments regarding Florida Governor Ron DeSantis signing House Bill 7123, Taxation, into law. The legislation will deliver broad-based tax relief to families and businesses across the state, with a focus on sales tax holidays that offer a tax savings for Florida families preparing for the upcoming 2019 Hurricane Season and the 2019-2020 school year, as well as several tax relief benefits related to hurricane response and recovery.  In total, the bill provides approximately $121 million in tax relief. Additionally, while providing unprecedented overall and per-student funding for K-12 Education, provisions of Senate Bill 2500, the General Appropriations Act, lower the property tax rate that supports funding for public schools.

 

“I am grateful to Governor DeSantis for signing this broad-based and meaningful tax relief legislation into law,” said President Galvano. “With the 2019 Atlantic Hurricane Season just around the corner, this legislation offers Florida families a tax savings when they purchase hurricane preparedness supplies. Additionally, the August “Back-To-School” Sales Tax Holiday offers a savings for families managing the cost to prepare children for the new school year. We also take another step to reduce the business rent tax, which will help the small businesses in our communities that lease property, and include targeted tax relief for the agricultural communities in Florida’s Panhandle devastated by Hurricane Michael.”

 

Establishes the 2019 Back-to-School Sales Tax Holiday

The legislation creates a five-day “back-to-school” sales tax holiday from August 2 to August 6, 2019, for clothing, footwear, and backpacks costing $60 or less, school supplies costing $15 or less, and personal computers or personal computer-related accessories costing $1,000 or less per item.

 

Establishes the 2019 Disaster Preparedness Sales Tax Holiday

The legislation creates a seven-day “disaster preparedness” sales tax holiday from May 31 to June 6, 2019, for disaster preparedness supplies. Some examples of tax-free items include: flashlights and lanterns costing $20 or less; radios and tarps costing $50 or less; coolers and batteries costing $30 or less; and, generators costing $750 or less.

 

Creates Tax Exemptions for Hurricane Michael Recovery

The legislation creates several tax relief benefits related to hurricane response and recovery including:

 

 

Reduces Business Rent Tax

The legislation permanently lowers the sales tax charged on commercial leases. In 2017, the Legislature lowered the six percent tax on the total rent or license fee charged for renting any real property from 6 percent to 5.8 percent. In 2018, the Legislature further reduced the business rent tax from 5.8 percent to 5.7 percent. HB 7123 further reduces the business rent tax from 5.7 percent to 5.5 percent. Florida is the only state in the country to impose this type of tax on businesses. 

 

Additional Tax Relief Measures

• Extends the time period insurance companies can make qualifying contributions to a Scholarship Funding Organization.
• Current law exempts transfers of homestead property between spouses from documentary stamp tax when the transfer occurs within one year of marriage. The amendment removes the one-year limitation. Florida Land Title Association Initiative.
• Exempts from sales tax property purchased by a business for resale that is donated to a charitable organization.
• Further reduces certain traffic fines, from a 9% reduction to an 18% reduction in the fine, when the driver attends traffic school.

 

Background: As Florida continues to recover from the Great Recession, the Legislature has prioritized broad-based tax relief for Florida’s families and businesses.

 

2018: House Bill 7087 established Back-to-School and Hurricane Preparedness Sales Tax Holidays, further reduced the business rent tax, and created several exemptions related to hurricane response, preparedness and recovery, while the state budget reduced local property tax rates.

 

2017: House Bill 7109 established Back-to-School and Hurricane Preparedness Sales Tax Holidays, created a sales tax exemption for feminine hygiene products, and reduced the business rent tax, while the state budget reduced local property tax rates.

 

2016: House Bill 7099 permanently eliminated the sales tax for machinery and manufacturing equipment, and established a Back-to-School Sales Tax Holiday, while the state budget reduced local property tax rates.

 

 

2015: House Bill 33-A permanently decreased the communication services tax (CST) on Floridians’ phones and television services, instituted a Back-to-School Sales Tax Holiday, and among other tax relief measures, eliminated the sales tax charged to returning service members and their families who purchased a vehicle overseas.

 

 

2014: House Bill 5601 established Back-to-School and Hurricane Preparedness Sales Tax Holidays; created permanent sales tax exemptions for children’s car seats, booster seats, and bicycle helmets; and provided a nearly $400 million reduction in vehicle registration fees.  The legislation reduced certain annual fees paid to register a motor vehicle to the amount paid prior to 2009. In addition to other tax relief measures passed in 2014, this legislation provided annual fee relief to every Floridian who registers a car or truck.

 

For more information, please visit www.FLSenate.gov.

 

Last week closed out a big week for FLTA and Florida. For all intense purposes the 2019 legislative session closed out on Friday and officially adjourned with approval of the State budget on Saturday. During the past 60 plus days the association focused on several initiatives including Remote Online Notary, Public Records for Law Enforcement Personnel, closing out expired building permits, implementation of a blockchain working group and a long standing initiative of removing inter spousal doc stamps. Here are where things stand today:

Electronic Legal Documents

HB 409 by Rep. Perez (R-Miami) and SB 548 by Sen. Brandes (R-St. Petersburg)

Authorizes online notarizations; specifies requirements & standards for performance of such online notarizations; requires DOS to adopt rules by specified date. Effective Date:January 1, 2020

HB 409 passed the House by a vote of 87-28 and the State Senate by a vote of 39-0 and will now head to Governor DeSantis for his consideration.

Taxation - Intraspousal Transfer of Homestead Property

HB 7123 by Rep. Avila

This bill is tax relief legislation that includes language eliminating DOC stamps for intraspousal transfer of property.   

HB 7123 passed the House of Representatives by a vote of 81-25 and the State Senate by a vote of  23-17.  The bill will now head to Governor DeSantis for his consideration.

Building Permits

HB 447 by Rep. Diamond (D-St. Petersburg) and Sen. Perry (R-Gainesville)

Authorizes counties & local government to provide notice to certain persons; authorizes counties & local governments to charge person one search fee in certain amount; provides exemptions to certain contracting requirements; authorizes local enforcement agency to close permit; provides that contractor is not liable in certain circumstances; prohibits local enforcement agency from penalizing certain purchasers of property.

HB 447 passed the House of Representatives by a vote of 109-0 and the State Senate by a vote of 40-0 and will now head to Governor DeSantis for his consideration.

Blockchain Workgroup

SB 1024 by Sen. Gruters (R-Sarasota) and Rep. Santiago (R-Deltona)

Establishes Florida Blockchain Working Group in DFS; provides for membership & duties of working group; requires working group to submit report to Governor & Legislature & make presentations; requires department to provide support staff & other assistance to working group; provides for termination of working group.

SB 1024 passed the Senate by a vote of 39-0 and the House of Representatives by a vote of 113-0 and will now head to Governor DeSantis for his consideration.

Public Records Exemption Expansion – Law Enforcement Home Address

CS/CS/CS/SB 248 by Sen. Hooper (R-Palm Harbor) and Rep. Zika (R-Miami)

This legislation expands a current public records exemption for law enforcement personnel’s home address and removes information critical to the title industry, specifically the legal property description, parcel identification number or any other property information that could reveal the home address of the law enforcement personnel.  Both bills include language to authorize the protected employee to waive the confidentiality so the title industry can complete their work.

SB 248 passed the State Senate by a vote of 39-0 and the House of Representatives by a vote of 116-0.  Governor DeSantis has approved this legislation as Chapter Law 2019-12.

  

CATIC is pleased to announce that its proprietary software, PrepExpress Online^® (PE Online), is now available for use in Florida transactions. This customized closing tool was developed in-house by our knowledgeable IT staff, with input from the paralegals, attorneys, and title agents who use the software every day. PE Online streamlines the preparation of policies, while automating the calculation of tax adjustments, recording fees, conveyance and transfer taxes, and disbursements.  Other features include the creation of closing protection letters; the export of disbursement data; and the preparation of 1099-S forms, the Closing Disclosure, and the HUD-1 Form.

PE Online is offered exclusively to CATIC agents, at no cost. It has been used for several years by CATIC agents in the other states in which we operate, and our agents often comment on the program’s ease of use and its straightforward and intuitive nature. We anticipate that our Florida agents will agree!

To learn more about CATIC and the many ways in which we can help you increase your productivity and keep your overhead costs in check, contact Christopher Condie, Senior Vice President, Florida State Operations.

About CATIC

CATIC is the major operating subsidiary of its parent holding company, CATIC Financial, Inc. In business for more than 50 years, the Company has offices throughout New England and in Florida, and issues its policies through a network of more than 3,000 attorneys and independent title agents. The Company is an underwriting member of the American Land Title Association (ALTA) and the North American Bar-Related^® Title Insurers. Its sister company, CATIC Title Insurance Company, issues title policies in New York, New Jersey, and Pennsylvania. Through an affiliate, the Company also provides services in connection with tax-deferred exchanges of like-kind property. 

3.18.19 - West Palm Beach, FL - The Palm Beach County Property Appraiser’s Office announces a new and improved feature on the Property Appraiser Public Access (PAPA) website - E file for a homestead exemption on the same day you close on a home. This pertains to all future, permanent Florida (resident) homeowners in Palm Beach County.  

In the past, in order to E file for a homestead exemption on the PAPA website, it was required that you have your recorded deed, along with other necessary documents.

Now, the day you close on a home in Palm Beach County, you can E file for a homestead exemption on the PAPA website, without the deed. (After you E file, your application will be processed and completed by our office).

What does this mean for new (permanent resident) homeowners in Palm Beach County? No more forgetting to file for a homestead exemption, no waiting and of course, it’s paperless.

The homestead exemption in the state of Florida can save hundreds of dollars in property taxes for permanent Florida residents. The first $25,000 in property value is exempt from all property taxes, including school district taxes. The additional $25,000 exemption is available for non-school taxes and applies only to the assessed value between $50,000 and $75,000. *If you already have a homestead exemption on your property, you do NOT need to reapply.

In addition, Florida residents can take advantage of other property tax savings including, if you’re moving within the state of Florida and you’re E filing for a homestead exemption, you can E file for portability too. (Portability is transferring all or a significant portion of your cap savings, up to $500,000, from a home with a homestead exemption to a new home within the state of Florida that qualifies for a homestead exemption).

For details on the Homestead Exemption E file, go to the PAPA website: www.pbcgov.com/PAPA

On March 5^th the Miami-Dade Board of County Commissioners voted unanimously (11-0) to move the newly proposed ordinance forward. The ordinance now sits with the mayor for 10 days and will become law 90 days later (on or about June 15).

Instead of the buyer having to acknowledge that a property is within a Special Taxing District on the face of the deed, the seller is obligated to disclose this now within the sales contract.

With the repeal and replace of this ordinance, FLTA would like to thank Commissioner Diaz, Commissioner Cava and their teams for hearing our concerns on this issue and seeing this through.

The Florida Land Title Association has been working overtime to safeguard our industry’s responsibilities in the settlement process.   The land title industry’s responsibilities in conducting closings and issuing title insurance play a crucial role in protecting real property rights and making our real estate market one of the most envied in the world.

Our global leading industry allows real property to be sold and mortgaged with greater security and efficiency than in any other country. In the course of our normal lives it’s easy to overlook the importance of the service we perform in helping owners convey their property, home buyers to fulfill their dreams or industries to buy land for development. All of these transactions contribute to the prosperity of our economy and help all of us fulfill the American dream. 

Internationally renowned economist Hernando De Soto is credited with the widely accepted thesis that the economic success of the United States relies on a clear system of property rights which are the basis for entrepreneurship and the creation of wealth and capital. DeSoto states “You are able to hold, transfer, assess and certify the value of such assets only through documents that have been legally authenticated by a global system of rules, procedures and standards. Ensuring that the relationship between those documents and each of the independent assets they represent is never debased requires a formidable system of legal property rights. That system produces the trust that allows credit and capital to flow and markets to work.”

Our role in examining the official records to determine insurable real property interests while applying complex rules affecting property rights such as court records in probate and guardianship cases, Florida’s constitutional protections for homestead property, bankruptcy proceedings, powers of attorney, divorce proceedings, and trusts while being wary for any indications of fraud serves an essential purpose. We are the unique and crucial factor in protecting real property rights and securing the interests of owners and mortgage lenders by examining these records to determine insurable interests, clear title objections, close in accordance with instructions (while working to prevent wire fraud) and indemnifying these parties through the title insurance policies we issue. The land title industry performs an essential role in the system DeSoto celebrates.

The FLTA has been working tirelessly advocating for our members on proposed legislation and regulatory issues to make sure our industry’s unique and vital services are safeguarded. Here’s a summary of the most prominent issues:

Remote Online Notarizations (“RON”) – The FLTA supports legislation authorizing remote online notarizations and is working to assure sufficient security procedures are included in the legislation. We are also working to clarify that separate line item charges can be made for fees associated with RON. This legislation is expected to pass the legislature.

Data Call Information Revisions – We are working with the OIR on revising the Data Call forms to both simplify and clarify the information requested. Our goal is to make compliance easier while obtaining more uniform responses. The promulgated rates will be based on the data call information received by the OIR so accurate, uniform reporting is essential. 2018 Data Call results are due May 31, 2019.

DFS Compliance Guidance – The DFS published a compliance guidance article on February 6th regarding third party closing fees.   The FLTA became immediately involved due to questions raised by the article which led to the DFS publishing an enhanced compliance guidance on February 14th that clarified their position on this issue. An FLTA group of agents and insurers met with the DFS to discuss our concerns and better understand theirs. Read about the FLTA meeting with the DFS here.

The members of the FLTA provide the world’s leading real estate settlement services and are critical to the success of the real estate market. Protecting real property rights is what our industry does. Protecting our members role in the real estate settlement process is what the FLTA does. The FLTA is a strong advocate for title agents and insurers in Tallahassee and will continue to advocate and educate on their behalf. Our association is strong and we have every reason to be proud of our members and the crucial role they play in the success of our real estate market.

- 2019 FLTA President, Kevin Thomas

On March 5th, the Florida Legislature opened its 121^st Regular Session. With several hundred bills now filed, which ones will make it through? Which ones will fall short on time? Which ones just won't be heard?

Without a doubt, there are so many unanswered questions as how this session will shape out and only time will tell. Here's how a couple bills fared this week that FLTA is tracking.

House Bill 409: Electronic Notarization

Also known as, Remote Online Notarization (RON), this bill authorizes online notarizations; specifies requirements & standards for performance of such online notarizations; requires Department of State to adopt rules by specified date. 

The bill was scheduled to appear before its first committee (Civil Justice) in the House this week, but due to a full agenda the committee simply ran out of time and temporarily postponed (commonly referred to as TP’d) until their next meeting. It is now anticipated to appear next week. Following this meeting, the bill will go before 2 more committees (Transportation & Tourism and Judiciary) before going to the House floor.

The Senate version (SB 548) of this bill has not been added to their first committee agenda at this time. This bill, too, will be heard in 3 committees before going to the Senate floor.

Senate Bill 248: Public Records / Civilian Personnel Employed by a Law Enforcement Agency

This bill focuses on expanding exemptions from public records requirements for agency personnel information by defining the term “home addresses” for purposes of public records exemptions for personal identifying and location information of certain agency personnel and their family members; exempting personal identifying and location information of active or former civilian personnel employed by a law enforcement agency, and of spouses and children of such personnel, from public records requirements; providing for legislative review and repeal of the exemptions; providing statements of public necessity, etc.

This bill was heard for its 2^nd committee hearing this week in the Senate and with concerns raised by the Title Industry in the challenges this can cause in identifying the chain of title, the bill has now been amended to allow the protected party to authorize a 3^rd party (title agent) to obtain the original instrument without redaction on their behalf. The bill is now identical to the House version and will move to its final Senate committee, Rules. The House version has passed its committee meetings and awaits a hearing on the House Floor.

FLTA Legislative Tracking

Understanding the Department of Financial Services Guidance on Closing Service Fees

The Florida Department of Financial Services (Department) maintains a page on its website for publishing reminders regarding the Department’s interpretation of laws pertaining to title agents, “Compliance Information: Title Insurance Agents”.  The Department tells us that these reminders, sometimes individually termed a Guidance, do not “replace statutes, department rules, orders or case law.”  The items published on this page are intended as reminders to help title agents comply with the law.

How We Arrived Here

The Department recently published Guidance followed by an enhanced Guidance relating to charges for “closing services” as defined in F.S. 627.7711.  The enhanced Guidance can be found under the tab for Title Insurance Agency Fees on the above described Compliance Information page.  Leadership of the Florida Land Title Association (FLTA) presented a written request for clarification to the Department regarding a possible interpretation in the original Guidance to the effect that all closing related charges, including third party charges, must be included in a single charge for closing services.  The FLTA had concern the Department was stating third-party charges relating to the closing cannot be “passed through,” or charged directly to consumers on the closing disclosure or settlement statement.  Following this request from the FLTA, the Department published the enhanced Guidance you will find on the Department website today to more clearly articulate the position maintained by the Department regarding charges for closing services and the title agent’s ability to charge consumers for third-party fees in addition to the charge for closing services. 

Who Regulates What?

The Guidance states clearly that the Department does not regulate the amount of each fee charged at closing.  The Guidance clarifies that while other regulators, such as the Consumer Financial Protection Bureau (CFPB), regulate charges included in a closing disclosure, the Department’s role is “making sure consumers are not deceived by our licensees when they purchase title insurance and close on a property.”  The Department enforces the Unfair Insurance Trade Practices Act, the scope of which is defined in F.S. 626.9541.  This includes deceptive practices relating to premium charges and services provided by title agents, including charges for closing services.   

In the present market, title agents are faced with more and more third-party charges that, if incorporated into the charge for closing services would increase the charge significantly and may result in consumers paying for services that were not necessary for their closing.  For example, not every closing involves a mobile notary.  Delivery service charges vary between closings.  There are more examples, but in summary we can conclude that every closing is unique, and the consumer is better served if some of the third-party charges related to closing are charged to the consumer based upon their circumstances. 

FLTA Meets With DFS For Clarity and Next Steps

To obtain a clear understanding between the title industry and the Department regarding this important issue, the leadership of the FLTA, including the Executive Director and representatives of the Agent’s Section and the Insurer’s Section, met with Greg Thomas, Director of the Division of Insurance Agent and Agency Services, and his staff on February 22, 2019.  The meeting had a friendly tone and the FLTA expressed appreciation to the Director and his staff for agreeing to meet with the FLTA representatives. 

At the meeting, the Department again stated that it does not seek to regulate charges for closing services, including the practice of passing through third-party charges to consumers.  We were reminded that the CFPB provides guidance on practices relating to charges contained in a closing disclosure.   The Department stressed its focus is on deceptive practices, which was described in one example as quoting or advertising a low charge for closing services and then surprising the consumer with several third-party fees and “junk fees” immediately prior to or at closing.  The Department confirmed for us that if all charges, including third party “pass through” charges, are disclosed to the consumer and agreed upon by the consumer while the consumer can still shop, then the Department is satisfied because the practice is not deceptive.  The message from the Department was to treat consumers fairly by making sure the consumer is aware of charges in advance and agrees to the charges.

The Department recognizes that sometimes a last-minute charge is unavoidable.  For example, a person may be snowbound in a city and a mobile notary becomes necessary.  The Department does not have an issue with such a charge, and instead is focused upon deceptive practices, which is a pattern of activity.  The Department did state that it might prosecute a single act if the act were egregious and harmful to the consumer. 

Another issue addressed at the meeting was the practice of paying third party charges, such as a charge for a municipal lien search, outside of closing directly to the company providing the search.  The Department stated that such practices may distort rate making through data calls if these charges are not listed on the closing disclosure or settlement statement as “Paid Outside Closing,” or “POC.”  The Department noted that it does not directly regulate this practice if it’s not done in a deceptive manner, but the CFPB does regulate the practice of listing all charges related to the settlement on the closing disclosure.

Filing Complaints: Details are Important

Director Thomas pointed out that the Department regulates approximately 900,000 licensees and conducts more than 1000 audits per year, with a focus on identifying deceptive practices.  The title industry is not singled out.  The Department staff encourages the filing of complaints by licensees if a competitor’s deceptive practice is identified.  While it’s possible to make a complaint anonymously, the Department asked that any complaint include the name and identifying information of the party being reported, along with a detailed description and documentary evidence, if available, in support of the complaint.  The Department recognized that title agents do not control the entire settlement process, and often the offending parties may not be regulated by the Department.  The Department will help to the extent it can and will refer violations to other regulators when appropriate.The Department can be reached directly for questions and complaints at Title@MyFloridaCFO.com.

The FLTA thanks Director Thomas and his staff for meeting with us and for the clarification of the Department’s position.  While the Department stated that no further Guidance on this issue is being considered, we will continue to work to keep you informed regarding regulatory developments.

Your Association Hard at Work!

The above is not legal advice, should you have specific questions you should contact your counsel or DFS directly, title@myfloridacfo.com.

Not a member? Join today!