- September 22, 1995
- All Stewart Offices and Agents in Florida
- Homebuyer's Protection Act
A new statute entitled the Homebuyer's Protection Act goes into effect October 1, 1995. It deals with certain aspects of home building and several sections of the Act relate to the role of title insurance agents.
F.S. 501.1375 (2) and (3), "Deposits received for purchase of residential dwelling units", now requires that a deposit made for the purchase of a completed house of up to 10% of the purchase price shall be held in an interest-bearing escrow account which shall be set up by the contractor or developer with a savings and loan association or a bank or trust company, or be with a Florida attorney, a Florida real estate broker, or a Florida title insurance company. Other provisions of the law, such as establishing that the interest is payable to the builder and that a surety bond may be placed in substitution of the deposit continue in effect. Any deposit you are holding should be released at closing but only with the signatures of both the builder and the buyer.
F.S. 713-165, "Request for list of subcontractors and suppliers", provides that when an owner of real property requests from the contractor a list of all suppliers, the contractor must supply that list within ten days. This would appear to apply only in the case where the owner of a lot hires a contractor to build a home on that lot as opposed to the more usual situation where one buys a house in a subdivision and does not take title to anything until the completion of the building. However, it is correct title closing practice to require such a list from the contractor in conjunction with the closing and to obtain lien waivers from all of those subcontractors.
F.S. 713.35, "Making or furnishing false statement", has been modified to provide that anyone who knowingly furnishes a written statement about the payment of subcontractors is guilty of a felony. That section does not specifically benefit title agencies but this section may apply to a no-lien affidavit relied upon by a title agent in conducting the closing. In order to have this statute have an impact, it is important to be certain that your no-lien affidavits are executed only by a principal or officer or director of the building company and that duty must not be delegated to a lower level employee.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.