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What Not to Sign at Closing

By Howard C. Stross
September 28, 2020

If you are presented with a document at closing you feel may be a release of liability, do not sign it. Contact your attorney instead.

There are many documents a buyer must sign in most real estate transactions. Almost all of the documents have a valid purpose. Recently we represented buyers for a residential closing handled by a commercial title insurance agency. The title insurance agent provided a good example of why it’s important to know what you are signing and why you are signing it.

The title insurance agent presented a release of liability document to the buyers, our clients, expecting the buyers to sign it. The purpose of the release had nothing to do with the closing and had everything to do with an attempt by the title insurance agency to limit or terminate any responsibility for errors they may have made that are discovered after closing.

There is no benefit to the buyers, or any other parties in the real estate transaction, to provide a release of liability to the title insurance agent. At best, doing so by the title insurance agent is unethical and it probably would not hold up in court if the title insurance agency tried to use the release document as a defense to a later claim filed after the completion of the closing.

At another closing, at an attorney’s office where the attorney was the title insurance agent, a similar but different situation occurred. This was an attempt to reduce or eliminate liability on the part of the seller of the real estate, not the title insurance agent. A document was presented to the buyer, our client, that if signed would have amended the purchase and sale agreement from a standard contract, where seller did have liability if seller’s representations were in error, to an AS-IS contract where seller would have eliminated any seller liability if issues arose following closing. I advised our client not to sign the document and after some huffing and puffing by the attorney title insurance agent, the transaction did close.

When you are spending tens or hundreds of thousands of dollars to acquire real estate, know what you are signing and know what you should not sign.

We can help. We are real estate attorneys. Well before you sign a purchase agreement, contact Stross Law Firm, PA at 813-852-6500 so you may have representation before you commit to purchasing your dream home, rental property or piece of commercial real estate.

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