PLEASE TURN IN YOUR DOCUMENTS

August 25th, 2011 at 11:43 pm

Whenever the legal department gets a call or letter complaining about one of our agents, the first thing we do is ask for the subject transaction file. There are multiple reasons for that. First, the documents don’t lie. No matter what the client claims we did wrong, the documents say what they say and do not change over time. People’s memories, on the other hand, do fade over time and are affected by their interests, specifically the client’s desire that we pay them money. Further, our documents often immediately do away with a client’s claim. For example, in one instance we got a lawyer letter alleging that a prior inspection report was never given to the buyer. When we reviewed the file, , we found a Receipt for Documents signed by the buyer stating they got the report. That one document defeated the buyer’s claim. So, as you can see, documents are very important to us.

Unfortunately, it is also true that often times when we ask for documents we find that they have not been turned in. It is apparently a very common practice for agents to only turn their documents in at the end of a deal, when it is time to get paid. As a result, the office, while aware that the transaction is open, has seen and reviewed nothing. This practice creates many problems. First, it is a violation of DRE regulations and puts your license at risk. The DRE explicitly requires that all “transactions requiring a real estate license..” and “documents which may have a material effect upon the rights or obligations of a party to the transaction..” must be subject to review, oversight, inspection and management. Obviously, almost every paper we handle in a transaction materially affects our clients’ rights and obligations. Unfortunately, if they are not turned in on time, they cannot be reviewed and the DRE regulations are being violated.

Next, and as important, if documents are not turned in, we cannot review them and help you avoid the problems they may create. Please remember that both your manager and file reviewer have significant experience and will be able to spot potential problems created by your transaction documents. Of course, problems are much easier to correct early in a transaction, before something has gone wrong. However, by not turning documents in, you are not giving the reviewer the opportunity to help you avoid a problem. Frankly, it just makes no sense. As I think you all understand, when a problem arises and you get the legal department involved quickly, it helps us keep the problem small and achieve a quick resolution. The same is true for document review. If your reviewer spots a problem the day after a document is executed, it can be fixed more easily. That is not true if they first see the document one day before closing.

As a result, please remember to turn in all documents to your office as soon as possible after their execution. That is our company policy. More importantly, however, it will help protect you from DRE problems and conflicts with your clients. Thanks.

Like what you see here? Sign up for more! Our free e-newsletter informs you of listings in your community, insider real estate tips, the latest in home trends, and more.

Recent Posts

Archive