Ownership of Title Agency
Adopted: July 23, 1999
Opinion examines the ownership of a title insurance agency by lawyers in North and South Carolina as well as the supervision of an independent paralegal.
Inquiry #1:
Certain lawyers, some licensed to practice in only North Carolina and some licensed to practice in both North and South Carolina, own and operate a title insurance agency that issues title policies for properties in both North and South Carolina. The lawyers who are licensed to practice in South Carolina provide title certification to the title agency for the purpose of writing title policies on South Carolina properties.
May a North Carolina lawyer own all or part of a title insurance agency that writes title policies on North Carolina property?
Opinion #1:
Yes, provided the lawyer does not give a title opinion to the title insurance company for which the title agency issues policies. See RPC 185.
Inquiry #2:
May North Carolina lawyers own all or part of a title insurance company that writes title policies in South Carolina?
Opinion #2:
Yes, if allowed by law.
Inquiry #3:
May North Carolina lawyers act as title insurance agents for a title insurance company owned by the same lawyers?
Opinion #3:
Yes, if allowed by law and subject to opinion #1 above.
Inquiry #4:
May lawyers licensed to practice in both North and South Carolina who own a title insurance agency that writes policies in both states provide title certifications to the agency for real estate located in South Carolina?
Opinion #4:
Yes, if allowed by law and the ethical code of South Carolina.
Inquiry #5:
The North Carolina lawyers provide title certification services for North Carolina real estate transactions. To undertake certification of title to real estate located outside of the lawyers' immediate community, the lawyers utilize independent title abstractors who are not licensed lawyers. Prior to utilizing the services of a title abstractor, the lawyers conduct an interview of each abstractor, evaluate his or her procedures and methods, determine his or her level of education and experience, and conduct a reference check to evaluate the abstractor's performance history. Is this level of supervision adequate under the Revised Rules of Professional Conduct?
Opinion #5:
No. RPC 216 requires a lawyer who is using the services of a non-lawyer independent contractor to search a title to take reasonable steps to ascertain that the non-lawyer is competent and, at all times that the non-lawyer is assisting the lawyer, to provide the non-lawyer with appropriate supervision and instruction regardless of the distance between the lawyer and non-lawyer. See Rule 5.3. The opinion also indicates that the lawyer may not issue a title opinion unless the opinion is based upon the lawyer's own independent professional judgment, competence, and personal knowledge of the relevant records and documentation. See also the Guidelines for Use of Non-Lawyers in Rendering Legal Services of the North Carolina State Bar (July 18, 1998, #10). [Note: this opinion assumes that the lawyer is not giving a title certification to the title agency owned by the lawyer. See G.S. §58-26-1(a).]