Press / Media Mentions of Arthur van der Vant Arthur van der Vant Appointed Receiver by FDIC Chicago, IL (1888PressRelease) March 22, 2012 – Arthur van der Vant recently accepted Receivership of a broken townhouse development in Arlington Heights, Illinois. The Hon. Judge Elaine E. Bucklo, who was nominated by President Clinton and confirmed by [...]
Full disclosure is vital to a fair and proper real estate transaction, says Arthur van der Vant.
According to Illinois Receiver Arthur van der Vant, under the RESPA provisions a Controlled Business Arrangement (CBA) Disclosure is required whenever a settlement service provider refers the consumer to a provider with whom the referring party has an ownership or other beneficial interest.1 (see Miller v. Weitzer Panache Ltd. 751 F. Supp. 980 S.D.Fla.,1990) Arthur van der Vant cites this requirement where the court held that a home purchasers’ complaint, alleging injury as result of the vendor’s undisclosed referral agreements with providers of real estate settlement services, was sufficient to state cause of action for violation of Real Estate Settlement Procedures Act (Real Estate Settlement Procedure Act of 1974, §§ 8, 9, 12 U.S.C.A. §§ 2607, 2608).
Similarly,reports Arthur van der Vant, that issue is regulated in the Title Insurance Act of Illinois. Arthur van der Vant point out that Section 18(b) provides that “no title insurance company, independent escrowee, or title insurance agent may issue a title insurance policy to, or provide services to, an applicant if it knows or has reason to believe that the applicant was referred by any producer of title business or by any associate of such producer, where the producer, the associate, or both, have a financial interest in the title insurance company, independent escrowee, or title insurance agent to which business is referred.” This is applicable, according to Arthur van der Vant, “unless the producer has disclosed to any party paying for the products or services, or his representative, the financial interest of the producer of title business or associate referring the title business and a disclosure of an estimate of those charges to be paid.” Arthur van der Vant also notes that, “such disclosure must be made in writing on forms prescribed by the Director of Financial Institution prior to the time that the commitment for title insurance is issued. The title insurance company, independent escrowee, or title insurance agent shall maintain the disclosure forms for a period of 3 years.” (§215 ILCS 155/18).
Often, says Arthur van der Vant, real estate attorneys do not realize that by receiving money or other value from title companies (especially without prior disclosure of relationship with title company), they breach their fiduciary duty to their clients. (see Moll v. US Life Title Ins. Co., 170 F. Supp. 476, In re Equitable Office Bldg. Corp., 83 F. Supp. 531 (S.D.N.Y.), rev’d on other grounds, 175 F.2d 218 (2d Cir. 1949); New York State Opinion 351 (1974); New York State Opinion 320; ABA Comm. on Ethics and Professional Responsibility, Opinion 394 (1962); The Lawyer’s Code of Professional Responsibility, New York Judiciary Law (Appendix) DR 1-102(A)(4), EC 5-16, DR 5-101(A), DR 5-107(A) and EC 6-1 (McKinney 1975).Arthur van der Vant points out that, in Moll,the court stated that it cannot be disputed that examining attorneys, in the course of their representation of home purchasers, are ethically prohibited from accepting any money or thing of value from title insurance companies without first obtaining the express consent of their clients.However, Arthur van der Vant notes thatan attorney is permitted to act in the dual capacity of title examiner and representative of a party to a real estate transaction so long as full disclosure is made. In addition, says Arthur van der Vant, either the attorney gives the client a credit for the amount of the fees paid to the attorney by the title company, or the client expressly consents to the retention of the fee. SeeNew York State Opinion 576, pp. 8-9 (June 25, 1986). Examining counsel who receives money from title insurance companies, without the express consent of their clients, states Arthur van der Vant, are acting unethically and illegally. This is especially true, adds van der Vant, where “an attorney-agent performs no significant additional services in return for his portion of the premium . . . “. In Moll, any damage that occurred to plaintiffs stemmed from the failure of the attorneys to disclose the rebates. Arthur van der Vant points out that New York State Ethics Opinions makes clear that the violation is not the receipt of the payments but the failure to disclose and, if required, the failure to credit those payments against the attorney’s fee.
Arthur van der Vant is an Illinois Receiver and assignee based in Cook County, Illinois. He is an expert in real estate and corporate turnaround management with over 10,000 projects to his credit. As a member of several professional organizations, including the Turnaround Management Association and the National Association of Bankruptcy Trustees, Arthur van der Vant is up to date on every aspect of his profession. He is one of only a handful of Certified Commercial Investment Members (CCIM), and has trained at the World Bank Headquarters in Washington DC. For more information or to contact Arthur van der Vant, call 800-496-9107 or contact van der Vant at 2714 N. Ashland Ave. FL1, Chicago, IL 60614- 1106.
Arthur van der Vant encourages the reader to research this subject further and to familiarize him or herself with current RESPA regulations, as well as any future changes. More information can be found at the U.S. Department of Housing and Urban Development (HUD) website www.hud.gov. The data contained in this publication is provided by Arthur van der Vant for information purpose only. The accuracy of the data contained herein is deemed reliable, but is not guaranteed. The author and/or publisher do not engage in rendering legal, accounting, or any other professional advice, and suggests that the services of a professional in those fields should be sought. Any liability, loss, or risk, personal, or otherwise incurred as a result of using any of the information herein stated is not the responsibility of the author and/or publisher.
[1] Arthur van der Vant cites that RESPA defines these arrangements as: [A]n arrangement in which (A) a person who is in a position to refer business incident to or a part of a real estate settlement service involving a federally related mortgage loan, or an associate of such person, has either anaffiliate relationship with or a direct or beneficial ownership interest of more than 1 percent in a provider of settlement services; and (B) either of such persons directly or indirectly refers such business to that provider or affirmatively influences the selection of that provider. Id. § 2602(7).
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