- March 09, 2007
- All Issuing Offices in Delaware
- Delaware Real Estate Transactions Must be Directly Supervised by a Delaware Attorney
On September 2006, the Supreme Court of the State of Delaware issued an Order
which further clarifies the prior ruling under Mid-Atlantic Settlement
Services, Inc., et al (2000 WL 97-5062 Del.Supr..) The
Mid-Atlantic ruling held that real estate transactions constitute the
practice of law and, therefore, it is necessary for settlements to be held by a
In the Matter of a Member of the Bar of the Supreme Court of Delaware, Number 313, 2006, the Supreme Court published a Board of Professional Conduct ruling involving a matter wherein the Attorney used a third party settlement company for the disbursement of the settlement funds.
According to the Board of Professional Conduct, residential real estate transactions require that:
1) the Attorney explain the transaction to the extent reasonably necessary for the client to make an Informed Decision; and
2) the Attorney provides, as early as practicable, a written statement for the client's signature which confirms the client's knowledge of his/her absolute right to be represented by separate counsel; and
Rule 1.15 requires funds from all real estate transactions, must be held in the Attorney's Escrow Account.
The Board of Professional Responsibility reasoned that when a Delaware Attorney delegates the settlement and funds disbursement responsibility to a non-lawyer, there is no way the Attorney can supervise the disbursement of funds and comply with the requirements, accountability, and oversight embodied in Rule 1.15 and 1.15(A).
Please contact a Stewart Delaware underwriter if you have any questions concerning this or any other topic for which you need assistance. For on-line viewing of this and other bulletins, log onto http://vuwriter.com
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.