Obligation of Closing Company

[myip]

With so many recent problems with closing on ebay, what obligation of a closing company has - especially those link with PCC company -- ie: American Timeshare Closing

 

[Bill4728]

The following thread trys to answer that question:


What should closing companies do?

Here is what you should expect when closing a deeded TS

Quote:
Originally Posted by edited from John's quote below
For a deeded TS
1) Sales contract
2) Estoppel Research ( including ROFR )
3) Make sure all taxes are fully paid.
4) Escrow management
5) Prepare new deed and file deed with the county
6) Optain the transfer/ resort notification form(s) from the TS management company, route the forms to buyer and seller for completion, submit forms to TS management company and ensure they are processed.
7) Verify transfer occurred without issues

Here is what you should expect when closing a non-deeded TS

Quote:
Originally Posted by johnmfaeth
The closing company still does the following (for a non deeded TS):

1) Sales contract
2) Estoppel Research
3) Escrow management
4) Optain the transfer form(s) from the management company, route the forms to buyer and seller for completion, submit forms to management company and ensure they are processed.
5) Verify transfer occurred without issues

So it is often 3/4 the work effort of doing a deeded tmeshare.

Quote:
Originally Posted by johnmfaeth
It gets more expensive to do when the (resort) is located in Mexico or the Caribbean for example. Mail can take 1-2 weeks each way so the closing company will often use FedEx at $35 per envelope to save time.

 

[richardm]

Closing company responsibilities...

Just a few thoughts on this....

The estoppels process varies significantly with each settlement agent.. Always ask for a copy for your records to review as part of the closing. Some companies perform a "verbal" estoppels only.. This is worth about as much as the paper it isn't printed on...

Also- taxes are not something that will show up on the estoppels for many resorts. Unpaid taxes and other liens generally only show on a title report- available when you pay for a title search. If the resort does not collect taxes with the annual maintenance- they won't have any idea whether they've been paid to the county! The resort estoppels will show the ownership as free and clear- but there may be liens or judgments at the county level.

DaveH can give you info on this from a closing company perspective in a few days (I heard you are currently under the weather DaveH- hope you improve very soon!)...

My advice is always the same- insist on a settlement agent you know and trust that is familiar with the specific resort you are buying- or stick with a large and reputable title company or closing agency.

 

[Hoc]

The obligations of the timeshare closing company are what is set out on the documents you sign with them -- no more, no less. If you don't like what those documents say, then you need either to modify them or to find another closing company.

 

[Talent312]

The obligations of the timeshare closing company are what is set out on the documents you sign with them -- no more, no less. If you don't like what those documents say, then you need either to modify them or to find another closing company.

Many times, one engages a closing company verbally, without signing anything, or the other party does. Often the closing companies obligations are set forth in the rules and regulations governing the profession of the one who owns or operates the company, usually either a realtor or an attorney. IOW, someone who is licensed by the state to draft deeds, other closing documents and issue title insurance.

What they actually must do is perfect the closing in the manner and to extent that a party has requested and they have agreed, without negligence, much like one hires a doctor or dentist to do when one goes in for a procedure.

 

[Dave H]

Rich: Thanks for the best wishes, was in a car accident Tuesday and just now starting to feel better.

The obligations of the closing company can vary greatly with what they think they are supposed to do. Most of these that are owned by the PCC's prepare deeds and closing statements or their version of them. Most do not know what all the rules are like foreign sellers and FIRPTA, so they take the approach of not my problem, let somone else worry about it, I sure did not get paid to worry about that.


Talent, I will disagree with you on one part, many states do not regulate closing companies, so it is free game for them. Florida until October of this year had no requirements in place to call your self and escrow company or use those words in your advertising (it has only become a law this year after a lawyer was disbarred for having an escrow company and stealing all the escrow funds. He left a lot of homebuyers without their earnest money).

Many do not sell title insurance, so they are not regulated that way either. Attorneys do own some, realtors do as well and there are many licensed title companies out there too.

I am glad to see the reference to someone who is licensed by the state to prepare deeds, but I tell you, there are way to many including people recommended here on TUG that are in Florida and do not have people licensed by the state to prepare deeds in other states. Actually there are many here that do not understand the UPL issues and I am glad to see you make that reference in your post.

What can or should one expect in a closing company?

1. A totally neutral third party. That means none of this crazy POA siginings we see.
2 Someone LICENSED to transact business as an escrow agent or title company.
3. Someone who carries the necessary Errors and Omissions insurance, Fidelity BOnds, Surety Bonds required to do business in the state the timeshare is located in.
4. Someone who maintains separarte escrow and operating accounts. Ask, you might be surprised or ask for banking references to verify.

These are only some things, I am sure people can add to it on what they look for. Too many times, people focus on price. While price certainly needs to be a factor, the low price may not be the best price.

What if I sat at my dining room table and for $50 or $75 sat and copied deeds for people. I screw up and what can you get..... nothing. By the same token I have spent all the time and money to get licensed in every state I do business in and you have state agencies to complain to and that will take action on.

I work with an attorney that holds to a major belief, you can close with someone who holds a J.D. or a GED, you get what you paid for.

Those are some of the things I tell people to look for, others are free to add to it. Maybe we could get a sticky of the best ideas like their is a sticky on how to sell your timeshare that people can use.