AGENTconnect THE COLORADO AGENCY NEWSLETTER
Issue #15 | April 2017
DRAFTING DOCUMENTS FOR CLOSINGS: A SLIPPERY SLOPE! By: Sandy Plaven, Senior Underwriter
Every day escrow closers prepare certain documents to complete a real estate transaction for buyers or sellers. Have you ever wondered why our industry is allowed to prepare documents such as a Warranty Deed or Special Warranty Deed as required by the contract? Is drafting documents the practice of law? The answer is yes! In 1957, the Colorado Supreme Court determined that real estate brokers and closing and settlement companies were, in fact, engaging in the unlawful practice of law in preparing real estate documents attorneys typically prepare. (See Conway-Bogue Realty Investment Co. v. Denver Bar Association, 135 Colo. 398, P.2d 998 (1957) and Title Guaranty Company v. The Denver Bar Association, 312 P.2d (1957).) Recognizing various reasons why the public has difficulty accessing lawyers, the Colorado Supreme Court decided the public’s best interest would be served by permitting this drafting practice.
the title insurance and real estate industries. Certain types of conveyance deeds can be found under Colorado Revised Statutes C.R.S. 38-30-113 and C.R.S. 38-30-113 (1) (a). When using these approved forms, we are filling in the blanks per the contract. If we draft nonpermitted documents, we step onto a slippery slope of the unlawful practice of law, and it is fraught with danger. We could be held to the high standard of an attorney. When title and real estate professionals abuse this privilege, it is important to remember that the same authority that granted this privilege could take it away. Never prepare courtesy documents! This type of request should always be referred to an attorney for preparation. When you are not sure if the document you are drafting will put you on a slippery slope, please contact your local state underwriter for guidance.
The present practice granted by the Colorado Supreme Court has clear limitations for both
The information contained in this document was prepared by First American Title Insurance Company (“FATICO”) for informational purposes only and does not constitute legal advice. FATICO is not a law firm and this information is not intended to be legal advice. Readers should not act upon this without seeking advice from professional advisers. First American Title Insurance Company makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions. First American, the eagle logo, First American Title, and firstam.com are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates. AMD: 04/2017
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