The fiduciary duties of a title agent are a common topic in the real estate world. In the context of a title insurance company, the responsibilities arise from issuing a title insurance policy and closing a real estate transaction. Title agents owe their clients the fiduciary duties of disclosure, loyalty, care, and confidentiality. Title agents must always act in good faith, avoiding any acts of self-dealing that place personal interests in conflict with their clients.
The Fiduciary Duties of a Title Agent in Florida
Title agents in Florida cannot advance any interests adverse to their client’s interest. Title agents also cannot conduct their client’s business in a way that benefits themselves, a customer, a subagent, or any other party to the detriment of the client’s interest. Furthermore, Florida title agents cannot disclose their clients’ personal information acquired within the scope of employment as title agents. All personal data must be confidential unless a client explicitly releases an agent from this duty in writing.
Title agents in Florida also have the duty to use reasonable efforts to provide material information to their clients. Pursuit of self-interest is not allowed, and general fiduciary principles require that Florida title agents refrain from using their position to benefit themselves. A title agent breaches their fiduciary duty by using client-provided information in a way to which the client has not explicitly agreed in writing. A title agent may be subject to post-termination duties applicable to their use of confidential information provided by a client or otherwise acquired in the course of their relationship with the client.
Who Regulates Title Insurance Companies in Florida?
The Real Estate Settlement Procedures Act (RESPA), the Office of Financial Regulation, and the Florida Department of Business and Regulation regulate the title insurance industry. RESPA’s general purpose is to eliminate self-dealing, kickbacks, and upcharges. Escrow agents should not have any vested interest in the earnest money deposit they hold during a real estate transaction.
Section 69B-186.010 of the Florida Administrative Code Regulation is titled “Unlawful Rebates and Inducements Related to Title Insurance Transactions.” This regulation deals with limitations for “referrers of settlement services.” The language used is purposefully broad and encompasses title insurance agents and companies, real estate brokers and realtors, mortgage brokers, attorneys, bankers, sales associates, surveyors, developers, closing agents, and escrow agents. Almost anyone involved in a real estate transaction can be held personally liable for dishonest practices or “unlawful inducements” under this particular statute. An inducement generally refers to a promise or pledge that causes an individual to enter into a specific contract. In other words, an inducement is any motivation or incentive that persuades someone to take a particular action.
The Importance of Adhering to the Fiduciary Duties
All Florida title agents should be aware of their fiduciary duties and take steps to adhere to them. Even unintentional departures from title agents’ obligations could get them into legal trouble. As a Florida title insurance agent, the best way to stick to your fiduciary duties is to work with an experienced Florida Real Estate Lawyer like Attorney Romy B. Jurado, Esq.
Get in touch today by calling (305) 921-0976 or sending an email to [email protected] to schedule an initial consultation. Romy has helped many real estate professionals remain compliant with all applicable laws and regulations, and she can surely help you. If you are worried about adhering to your fiduciary duties, get in touch. She is only a phone call or email away.
