Expert: liznarr - 2/5/2010

Question
QUESTION: We are the sellers of residential property.  At our closing a closing agent was present.  Our Lawyer says he paid from our funds 400.00 for the closing agent, we looked up the definition of a closing agent and came up with the following: An individual who represents a buyer and handles the closing and
the legal transfer of title and ownership from the seller to the buyer. also called settlement agent.

We also looked up who pays this agent in NY state (that is where  we live) and found out it is the buyer.  A check for Our Transfer tax, school taxes, and fee to record our POA was written from our funds to the company the closing agent worked for.   A separate check the closing agent according to our attorney was issued from our funds for $400.00 for her services which they define as closing and pick up fee.  

The attorney also charged an POA (power of attorney fee) and we were charged an equal amount on the Hud-1 to Record the POA.

Based on this I have a few questions:  

Aren't all fees charged to the seller including attorney, poa, suppose to be listed on the Hud-1 form?

Should we the sellers have to pay for any services that are not listed on our Hud-1?

Can the closing agent in NY State charge a fee to the seller? and without providing an invoice or receipt?

ANSWER: Hi Gloria,

The purpose of the HUD-1 is to DISCLOSE all charges of a transaction.  If you paid amounts for items not disclosed on your HUD-1, you should first call YOUR attorney involved in this transaction and ask him for explanations of all the questions you posed to me.  If he is unable to, or will not, provide you the answers and invoices you want, I strongly recommend that you call a HUD representative and get accurate information as it relates to your home sale.  Here is a link that will direct you to a local office in New York:  http://portal.hud.gov/portal/page/portal/HUD/localoffices

Also, here is another link to a HUD booklet, mainly designed for Buyers, but may provide some insight for you:
http://www.hud.gov/offices/hsg/ramh/res/Settlement-Booklet-January-6-REVISED.pdf
and
http://www.hud.gov/offices/hsg/ramh/res/sc3secta.cfm

To answer your question regarding invoices/receipts, YES, you are ABSOLUTELY entitled to an invoice/statement/receipt for ANY and ALL charges you paid for and disclosed on your HUD-1.

As to the $400.00 fee you were charged and paid for your Buyer’s settlement agent (and also any other services you paid which were not listed on your HUD-1), you should check your Contract of Sale to determine if there is any language in your Contract where you agreed to pay this fee -- or any other closing costs of the Buyer.  

If there is no such language in your Contract, again, I suggest you question YOUR attorney as to why this fee was on your side of the HUD-1 and charged to you.  Your Contract of Sale is the document you should ALWAYS refer to first to determine what your obligations under the Contract are.  A Contract of Sale can NOT override any Federal or State Laws that would dictate otherwise.

If there was any real estate agent involved, get the agent involved and ask pointed questions of him/her.

I hope the above information is helpful and points you in the direction you need for answers.  Good luck to you, and feel free to write again if you have additional questions.

Regards,
Elizabeth

---------- FOLLOW-UP ----------

QUESTION: We are the sellers in this transaction and we were never disclosed we would require the services of a title closer.  Was it required for us to have one, we have never had to use one in the past?  There services were listed on the HUD-1 for the buyer but not for us the sellers, nor did they provide a receipt for the services our lawyer claims to have paid them $400.00 for.  We were also issued a check refund from them for 100.00 for pick up fees, which is how it was noted on the check.  Our attorney explained this refund as an overcharge for the title closer?  If we are to pay a title closer which according to what we researched in NY the seller doesn't pay them, the buyer does, shouldn't this charge have been listed on the HUD-1 form.  The HUD also says that any fees paid out of closing should be listed as POC charges, but are not to be included in the calculations for the closing costs.  Another question is shouldn't the power of attorney fee to the lawyer have included the recording costs?  The recording fee on the HUD was 150.00 and the attorney billed us 150.00 on his invoice.  We would not even question any of these, it's just that everything about our closing was so unorthodox.  We sat separately from the buyers, nothing was explained, it all seemed so evasive, then costs that were charged out side of our closing costs were not disclosed, until I questioned our disbursement being short 400.00.  Then these extra costs came up with no invoices for services.

Answer
Gloria,
Generally, title closers are used for BUYERS.  A Seller only needs to transfer ownership at a closing and possibly sign a few other documents.  

Have you called (1) a HUD office in your area, or (2) your attorney and requested invoices as I suggested?  I don’t know NY procedures, but if you still have questions which your attorney cannot or will not answer, you should either call another attorney or complain to the NY Bar Association and possibly file a grievance if you do not get your invoices and satisfactory explanations.  The web site for the NY Bar Association is http://www.nysba.org/AM/Template.cfm?Section=Home%26Template=/Templates/NYSBA_Ho

Their telephone number is listed at the bottom of the main web page.  They handle complaints on attorneys who do not perform according to NY Code of Professional Responsibility, or who otherwise violate the law or fail to abide by the preceding code of conduct.  At the main web page, click on “For the Community,” then click on the link “Resolving Conflict with a NY Attorney.”

To answer your questions about items on the HUD-1, yes, items paid outside of closing in connection with the transaction should be disclosed on the HUD-1 as POC.  Ditto for the $400 fee you paid.  In short, ANY and ALL fees paid by or on behalf of either party in connection with the transaction should have been properly disclosed on the HUD-1.

Good luck to you, and let me know if you still have questions.

Regards,
Elizabeth