- May 17, 2012
- All Georgia Issuing Offices
- Senate Bill 365 - Georgia Attorney Required for the Settlement and Disbursement of Closing Proceeds; Separate Cause of Action for Violations
SB 365 was signed into law by the Governor on May 2, 2012. This amends Code Section 44-14-13 of the Official Code of Georgia Annotated relating to disbursement of settlement proceeds in the closing of residential real estate transactions. For all purchase money and refinance transactions, only a lender or an active member of the State Bar of Georgia shall conduct the closing and disburse the closing proceeds as Settlement Agent. Any individual, corporation, partnership or any entity conducting the closing and disbursing funds in violation of this section shall be liable for damages to any party suffering a loss and shall also be guilty of a misdemeanor.
As a reminder, a Georgia licensed attorney must be physically present at the closing on all real estate transactions for property located in this State. Also, the Supreme Court of Georgia has consistently held that it is the unauthorized practice of law for anyone but a Georgia licensed attorney to prepare and facilitate the execution of a deed of conveyance (including, but not limited to, a warranty deed, limited warranty deed, quitclaim deed, security deed, and deed to secure debt) and other legal instruments required in a real estate closing. See Formal Advisory Op. No. 86-5 (86-R9) (May 12, 1989); Formal Advisory Op. No. 00-3 (Feb. 11, 2000); and Formal Advisory Op. No. 03-2 (Nov. 10, 2003).
UNDERWRITING GUIDELINE: On all property located in the State of Georgia, Issuing Agents must use a Georgia licensed attorney in good standing with the State Bar to conduct the closing and to disburse funds on all residential real estate transactions.
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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.