To those ofyou who THINK that you will get justice from a Bar Association: guess again! You will be going against a panelof lawyers…there are NO non-lawyers in a bar association, soif you have a dispute witha lawyer, 99,9999% of the time they will find for their “brother” lawyer!
I had a billing dispute with an incompetent attorney once. I refused to pay the bill (which was outrageously padded). I went to arbitrartion with the Mass. Bar Association…it was a kangaroo court! I got an hour log insulting tirade from the head poobah…a lecture on why lawyers are the salt of the earth…they brushed aside my considerable grievences.
I wouldn’t trust these guys for a minute…with no non-lawyers present, you will never get a fair shake!
Well… not to hijack my own thread, but I think you need to take the remedial version of Econ 101 all over again. Real estate agents are essentially just sales people that market big ticket items in transactions that range in complexity from fairly straightforward to ferociously complex.
Ask yourself why do sales people (of any type) exist? Is it just some big scam concocted by the Masons and the Rotary Club? Why are successful companies hip deep in salespeople?
The basic answer is because we create “value” in the transaction for the people or entities that employ us. Obviously this is a more nebulous concept than delivering a cartload of turnips, and a crate of squealing pigs to market, but it’s an essential one for understanding the transactional nature of modern economies.
The bottom line is that it’s mainly about information. Beyond the particulars of the nature of any specific transaction salespeople mainly collect, manage and deliver information that is of value to people. It takes a good deal of effort to manage these tasks and deliver these services properly. Salespeople make a living because these informational services are valuable to clients and customers in sorting out what products or services are most appropriate for the clients needs.
This can be anything from a tractor, to an evening dress, to a 100 million dollar income property. Properly matching a customer’s needs (and means) with an appropriate product or service in a complex, or even not so complex, economy is service that people value and will pay for.
That may be true, but I think that if you looked into who owns the title insurance companies, you’d get a nasty surprise!
Title insurance is an ugly little scam. Essentially, they won’t insure the title on any property that has even a hint of uncertainty in its title. It’s like writing fire insurance policies only on buildings constructed entirely of stone - no flammable materials allowed.
I can’t find a cite, probably because the information in question is positively ancient, but I recall a Congressional study that found that the typical title insurance company took in something like $8 million a year in premiums, and paid out less than $10k in claims.
Well, it’s not on the settlement sheet as a “cut” to the broker or a check titled “title insurance share”, but it happens. A lot. It’s the fee paid for the “Settlement Room” or some such other artifice. Just suffice it to say that there’s a reason the broker often requires his/her agents and their clients to use a particular title company - because of the handshake relationship and payments in some form from which the broker benefits financially.
I’m not saying this negates the value of title insurance to the buyer, just that IME* this is how the business is done, and, as a result, the cost to the buyer is higher than it might otherwise be.
(I’ve bought and sold 8 residential properties in the past 2 years and, through a personal connection with my agent, got a “unique” insight into how things are done in the offices he’s worked in. Perhaps it’s just a New Jersey thing. But it definitely goes on.)
I know or knew two honest and competent used car dealers – one up north in my home town, now deceased, and one in the town five miles from my home. I’d vouch for the integrity and human decency of either under almost any circumstance you care to name.
And I’ve been taken by crooked used car dealers in the past, and know several who are largely honest and decent, but not to be trusted implicitly because they will try to dispose of lemons they’ve been saddled with, by careful deceit and omission.
What does that have to do with lawyers? Typically, a lawyer is someone with a high respect for the law and for his own competence at practicing it, with a desire to perform services for his clients and make money for himself and his firm in the process.
There are unquestionably a bunch of crooks out there. I know one man who milks every case he gets involved with for everything he can get out of it, who managed to transform a $500,000 settlement into title for an undevelopable parcel of land worth at most $100,000 and probably much less, and slightly under $20,000 left of the principal, and who finds reasons to raise objections to every proposed project in his home town so that he can “research” them, billing the town for his exorbitant fees which they promptly pass on to the person proposing the project.
And I know a competent attorney who is a strong advocate for his clients’ rights, prepared to tell them that what they thought were their rights are not borne out by the case law, who keeps his fees manageable, and who has a burning desire to see the man in the previous paragraph disbarred and censured, and ideally serve prison time.
As with everything else, there are good people and bad people, and the faults of the bad ones tar the others by association.
Where is this notion that real estate agents are involved participating in title insurance premiums or “kickbacks” coming from? Procedures do differ state to state, but so far as I know the’re not that different.
I’ve been to hundreds of settlements in my career and I have never heard of a real estate brokers fee for the “settement room” or a title insurance premium cut to brokers of any kind. Unless this is some odd, old school thing by tiny little brokerages, I have no idea where this notion is coming from.
In Maryland and Delaware where I am licensed, the attorney, or the title agent (who is often an attorney) is the one who offers the title insurance option at settlement, (assuming it is an option and not a requirement by the lender). Settlement is only very rarely held in a brokers office, and is almost always at the attorney or title agents office. Agents normally have nothing to do with the selection of title insurance or the insurance vendor (if chosen). It’s not in the scope of our procedural duties to get involved with it.
Are there any real estate agents on this board anywhere in the US that get a cut of a title insurance premium as a regular part of the transaction?
From my direct experience, as described in my post. And it’s the broker (or, more accurately, the business the broker owns), not the agent.
Again, the agents I’ve worked with never benefited, just the broker.
Astro, I’m not arguing with you or saying it’s a general, common practice, or that, really, I know all that much about it all. I’m just offering up my direct experience to the conversa-, um, hijack.
Oh yeah, and some of my best friends are lawyers. 
If you want a service, you have to be willing to pay for it. Some lawyers charge block fees instead of billables - it depends on the nature of the legal issue you’re presenting.
Actually, as Astro comments, lengthy contracts are designed to deal with the “what ifs” - what happens if various contingencies occur (“the building burned down - who was responsible for insuring it, the landlord or the tenant?”) Everyone hopes that you never need to deal with the bad “what ifs”, but it’s far better to have something in the contract than to have the contract silent on the issue. If the contract does deal with the particular “what if”, it will provide direction to the parties. It may be specific enough that there’s no doubt what should be done, or at least provide clear enough direction that the parties will likely be able to agree to a settlement. It’s the short, ambiguous contract that is likely to trigger litigation if the “what if” happens - because it doesn’t provide any guidance at all.
As for the stilted language, there are two factors at play. One is to be as precise as possible, to make the parties’ intentions as clear as can be. Language, though, is not always precise, so precision sometimes makes for stilted wording. The other factor is that lawyers tend to use “boilerplate” for the routine parts of a contract - that is, standard clauses that have been used for a long time. The reason is that if a standard clause has been around for a long time, then odds are it’s been considered by the courts, and everyone knows that it has a specific meaning. It’s better for the client if the lawyer uses a clause that is generally well-accepted and has been upheld by the courts, than to try to use unique wording in each contract. Unique wording is far more likely to triggger litigation in a dispute, because there will likely be more than one way to interpret it.
(Note: that doesn’t mean the entire contract should be standard terms. The lawyer drafting the contract for you should be able to judge when standard clauses will work, and what are the specific areas that are special in the particular transaction and need wording specifically designed. Knowing which is which is part of the professional training and skill of the lawyer in question.)
Under the traditional title system, titles are not static. One mistake in a transmission of title could affect the overall validity of the title. There may have been a mistake in the chain of title that no-one else noticed - given that a house is usually the single biggest investment most people have, don’t you want to be sure you’re getting good title? Or, the title may have been perfect the last time there was a transfer, but the lawyer handling that last transfer may have made a mistake which brings the title into question. (But I agree with you about the flaws of title by deeds - but that’s the fault of the Legislature, who design the system, not the lawyers who run it.)
As well, title searches involve things like compliance with zoning laws, which may change over time. There may have been a zoning change since the house last changed hands, and you want to be sure that any non-compliance is “grandfathered” under the new zoning law. Plus there’s the question of what the previous owners have done. Maybe when they bought the house ten years ago, there was perfect compliance with zoning laws, and then five years ago the owners built a huge garage that’s in breach of zoning laws that the city didn’t notice at the time. Or they poured a concrete patio over the gas line, and the gas company didn’t notice. Wouldn’t you want to find out those sorts of problems before you buy the house, since if you buy the house, you’ll be responsible for fixing them, even if you didn’t do them?
Lots of divorces are straightforward matters - if the parties can agree. Bear in mind that when a couple breaks up, there’s a lot of emotional baggage, especially if children are involved. If the parties can force themselves to be amicable and think of the best interests of the children, then divorce can be relatively straightforward. But if the parties are mad at each other…
As well, in family law there are lawyers commited to collaborative law approaches - they will only take a case if the clients agree not to go to court, and to try other means to resolve the dispute, such as mediation and interest-based negotiations. That won’t work in every case, of course, but that’s one option for the parties to try.
Shopping around is always a good idea, and a good lawyer will assist you to do so. A real estate lawyer likely won’t do criminal defence work, so if you go to the lawyer who handled your house deal, he or she will likely give you names of criminal defence lawyers. The local law society or bar association will give you names of lawyers who practise in a particular area of law.
Any lawyer who is worth his or her salt will send you a retainer letter, summarising what the problem is that you’ve sought advice on, what the possible options are, and what the lawyer’s fees will be. If a lawyer is not willing to send you a retainer letter, you can draw your own conclusions.
It may be that the first lawyer had not experienced that situation before, and therefore decided that he would need to research it to see if it would have any impact on the distribution of the estate. So, he told you upfront that he would need to do that, and that it would cost extra. You, as a consumer, decided that you did not want to pay for him to do that research, and went to another lawyer who evidently had enough experience in the area that he didn’t need to do any further research. How is that a bad thing?
Wouldn’t it have been worse if either:
a) the first lawyer didn’t turn his mind to the issue at all, without considering whether it would affect the distribution of the estate?, or,
b) the first lawyer recognised that he needed to do research, was afraid he would lose you as a client so didn’t tell you, did the research and billed you for it later?
In other words, the first lawyer, by raising the issue and telling you it would cost extra, acted in your best interests, even though there was a real possibility he would lose the file.
Why is that a sign of a bad lawyer?
Yes, my freind had to contact a Title Company about a claim- and the perdon he contacted said they had no idea of how to go about it, they had no one who 'did" claims-becuase that company had never had to pay out on a claim.
RE agents or homebuyers who think that a Title Company isn’t paying out some sort of kickback- what would happen if the buyer said “No, I want another Title company”?
I also want to apologize to the OP for my rant. HE is likely an upstanding member of the community, father, and honest agent. But since he is a member of this SDMB community- he is also exceptional, of course.
But still- used car salemen, telemarketeers, RE agents, lawyers & few few other occupations are often occupied by those of less than 100% morals.
The registry system is based on the English common law. It has the problems that ralph124c mentions, such as the constant need to re-check title with each transaction. However, it’s not the only available system for land-holdings.
The alternative is the Torrens system, where the government does certify the title, rather than just provide a registry of the chain of title. A Torrens system works on WYSIWYG: the title as shown at the Land Titles Office is the title. There’s no need to check the chain of title, nor for title insurance. If by some fluke there was a mistake made years ago by the titles system that brings the title into question, the land titles system has an assurance fund that compensates anyone who has suffered a loss.
The Torrens system was invented in the latter part of the 19th century, so is found mainly in the western parts of North America, where it could be implemented when new areas were opened for settlement. In Canada, the three prairie provinces have a pure Torrens system, while B.C. has a modified one. Northern Ontario, settled mainly in the latter part of the 19th century, is a Torrens system, but southern Ontario, settled much earlier, is a registry system. It’s hard to switch an entire area of land-holdings over from the registry system to a Torrens system, so older areas of settlement tend to be the old registry system. However, some jurisdictions, like Ontario and England, offer the option of transferring land from the registry system to the title system. (Muffin will know more about the Ontario system than I do, so he may be along to comment on this point.)
I was unaware of that system (being a lifelong East Coaster) - sounds like an excellent approach.
It reminds me of this wonderful tale, cached on Google from a now-defunct website:
Not quite the same, but in my jurisdiction we had a case a while ago where the broker would strongly suggest to clients that they should go to a particular financial institution for financing. Why? Well, it turned out that the institution in question was offering the broker a kick-back for business. So what happened? The broker in question was convicted of a criminal offence, of taking a hidden commission without telling his clients.
So no, I doubt that there brokers are getting a secret commission on title insurance - at least not in Canada. YMMV.
But, as I pointed out earlier, I’ll be there’s no law against brokers or attorneys owning a title insurance company, is there?
IANAL and I have never had any particularly bad experiences with them, but I wonder if there aren’t several issues that give lawyers a bad name:
1/ For most of us, our first contact with a lawyer might be when someone else’s lawyer is trying to do something to us. If we get a traffic ticket, an attorney for the city or the state is the guy who makes us pay the fine. If we get arrested, the prosecuting attorney is the guy who tries to put us in jail. If our spouse sues for divorce, his/her attorney is the guy who tries to take our kids and everything we own. Etc. And to have a chance of surviving, we have to go out and get our own attorney to stick up for us, and he gets paid by the hour. And in a criminal matter, you need a good lawyer more if you are innocent than if you are guilty. A guilty person can cut a deal and end up with a lesser punishment than he deserves. For an innocent person, it’s all or nothing–a conviction for something he didn’t do can ruin his life.
2/ Delaying tactics are a basic legal strategy. Instead of moving expeditiously to resolve a dispute, attorneys will try to wear down the other side. Many civil actions are settled without any decision on the merits simply because it’s cheaper to pay up than to finance extended litigation. I can understand a defense attorney doing whatever he can to keep his client out of prison, but in a divorce, a business dispute or other civil matter, both sides suffer when a case hangs over their heads for years.
3/ Medical malpractice has gotten a lot of attention recently because doctors’ insurance premiums have skyrocketed. Trial lawyers defend themselves by contending that most malpractice actions never go to trial, and only of few of those result in the $megazillion jury awards that we see on the front pages. But responding to a groundless suit requires legal time and fees, and insurance companies fear being exposed to a huge jury verdict. So they settle rather than fight. (I’ve wondered if one solution to the malpractice problem would be to have a panel of experts–both physicians and patient advocates–determine whether a doctor committed malpractice, and if so, then a jury of citizens would determine a fair amount of damages.)
The general public might feel better about lawyers if lawyers supported alternative dispute resolution, mediation, etc. There should be more alternatives to filing a suit. But lawyers aggressively protect their turf. Paralegals have been charged with practicing law without a license for telling people how to fill out standard forms. I’m not sure that attitude serves the public interest.
Settling disputes with the aid of lawyers is a lot better than some of the alternatives that we see every day on the evening news. But for many people in many circumstances, lawyers are not our friends.
I think this is a big part of it. Most dogs don’t like going to the vets, since in their experience, vets prod and poke them and stick things up their a**. Perfectly reasonable for a dog not to like vets. Similarly for most people, their contact with lawyers is during a very stressful time in their lives and the lawyer on the other side gets identified with it.
It obviously will vary from jurisdiction, but in my jurisdiction, mediation is an essential step in any civil action, ADR is encouraged, and some family lawyers are committed to collaborative law, which includes a contractual obligation not to go to court. Lawyers’s job is to do what’s best for the client - court is not necessarily in the client’s best interest.
Depends on the types of “standard forms”. If the client has a standard case, standard forms work. If the client’s got an unusual case, standard forms may be the worst thing possible for that particular client. Part of the lawyer’s training is to determine when the standard forms will do.
All three of them did, actually.
We chose the first on the recommendation of our real estate agent (which I’ve since learned isn’t a wise thing to do). The second we pulled out of the yellow pages because their office was conveniently located, and the third was recommended by my parents’ lawyer, with the disclaimer that he had known him years ago in law school and couldn’t vouch for his current ways.
I did file a report with the Better Business Bureau regarding the worst experience we had, but I will absolutely look into what the Canadian equivalent to the State Bar would be, and file a report there too. I guess I didn’t at the time because it seemed like just another hassle on top of so many hassles we already had, but I see now that it really isn’t fair of me to complain if I’m not willing to take the time to try and take steps towards making things different.
(And I just want to say again that I really do know that all lawyers are horrid, just that I can see how some of the stereotypes came to be. My parents’ lawyer has always been terrific for them, and my fiance’s parents love theirs as well.)
Elert, if your parents are in the same province as you, they can report bad lawyers to the Law Society of Upper Canada at 416-947-3300 or 1-800-668-7380. The complaints line is 416-947-3310 or 1-800-268-7568. (If you feel more comfortable going in person, it is the building beside city hall with the fence around it.)
For overbilling matters, your parents can have the local court assessment officer review the account as long as they don’t wait beyond the limitations period. For court addresses, go to http://www.attorneygeneral.jus.gov.on.ca/english/courts/cadaddr.asp
Hmmm. . . . I’ll have to try this in a couple of my collection matters. “Tell us where you bank accounts are or in goes the finger!”
Whoops, sorry Elret. I should have said you rather than your parents, and I should have spelt your name correctly. I still have not woken up yet.