Many clients often come to us with the question of whether they have to follow the buyer’s title
company, often due to language barriers or simply the comfort of using their own selected team to
review their side of the documents.
On February 4, 2022, Commonwealth of Virginia Bureau of Insurance (“BOI”) issued a Letter of guidance
regarding “split settlements” due to the confusion surrounding the legality of split settlements. As per
the Letter, “the designated settlement agent, [who is identified by the buyer], is responsible for
overseeing…[all of the settlement services prescribed by the Virginia Code], ensuring the accuracy of the
information obtained through these…[services], and ultimately appropriately directing the closing and
settlement.” Subsequently, the Bureau has taken the position “that the title settlement agent’s fiduciary
responsibility cannot be transferred, delegated or substituted, and that there can only be one
settlement agent involved in the settlement or closing.”
The BOI also provides further guidance, however, on this Letter in their “Frequently Asked Questions
Regarding ‘Split Settlements’” issued on February 16, 2022, which clarifies that sellers can still retain
their own legal counsel for a real estate transaction. Although “the designated settlement agent remains
responsible for overseeing the settlement and obtaining appropriate records and information necessary
to conduct and complete the settlement,” the seller(s) can always retain legal counsel to assist,
especially since “certain tasks necessary to consummate a proper settlement (e.g., preparation of a
deed) must be performed by a Virginia licensed attorney.” As such, our affiliated law firm,
Washingtonian Law, is available to assist our sellers who need reassurance and representation for their
legal needs on the seller side.
