Important DFS 3rd Party Fees & Miami-Dade Ordinance Updates

Melissa Jay Murphy shares the latest news on settlement/closing fees disclosure and Miami-Dade Ordinance 18-12 expanded cautionary statement requirement. 

Dear Members,

Update: DFS/3rd party vendor fees

I have sent out several communications about DFS (Department of Financial Services) publications regarding 3rd party fees: how they are to be shown on a closing statement, whether some fees must be "bundled" with your Closing Services fee and the like.  On Friday, February 22, 2019, representatives of the industry (through the auspices of the Florida Land Title Association) met with DFS officials for an open discussion of these issues.  As promised, here are my "take aways" from the meeting and an invitation for you to reach out with questions.

  • DFS is focused on their statutory obligation to protect consumers from unfair or deceptive trade practices as well as inflated costs resulting from unlawful inducements.  The current guidance puts a greater focus on notice to the consumer as to the fees they will be charged at closing.
  • DFS "prefers" that you include in your settlement/closing fee all “Closing Services” charges, as that term is defined in Sec. 627.7711(1)(a), F.S.,  to make it easier for the consumer to compare fees from agent to agent.
  • However, you can itemize 3rd party Closing Services fees in addition to your settlement/closing fee IF all such charges are disclosed to the consumer and the consumer agrees to the fee(s).  A good example of this is a pre-approved mobile notary fee required for the convenience of the consumer.
  • DFS recognizes that last minute charges are unavoidable and does not have an issue with such changes but instead is focused on whether the charge is deceptive.
  • Separate charges for some items will be "red flags" to DFS and will trigger a closer examination of your fees.  Examples are parking fees, location fees, storage fees, notary fees (without more detail), postage, wire fees.  These are fees that DFS may determine are unfair and deceptive because they really should be included in your settlement/closing fee.
  • Keep in mind you must still comply with TRID if those rules apply to your transaction.
  • Do not quote, advertise, include on a fee sheet or otherwise promote a settlement/closing fee and then charge a different fee or a litany of additional charges at closing.  This violates the law.  You must provide notice to the consumer that the fee(s) will be different than what was on your website, on a fee sheet or whatever.   Be sure your office staff and realtor partners have a copy of your most current fees.
  • DFS does not intend to issue any additional guidance on "notice."  So use your head.  Presenting additional charges at the closing table, without some form of prior notice to the consumer, is not adequate notice.
  • Reach out to me and/or Bob Rohan with your questions.  We will give you our best guess as to the right way to handle a particular situation.  But understand that we will not be able to give you absolutes or bright line guidance.  We can both be reached at regulatorycompliance@thefund.com.  You are free to contact me directly at mmurphy@thefund.com.

Here is a link to the meeting summary issued by FLTA.  
https://www.flta.org/Industry-News/7190699 I cannot stress enough how important it is that attorney agents support the efforts of FLTA on behalf of ALL agents so please consider joining FLTA and, even better, become active.

Technology Tidbit of the Week. 

This is not a recurring topic in my blog posts since this is not my "thing."  This tip, however, seems pretty low-tech.  In reviewing our Member-facing websites, we have discovered that we need to upgrade a "security thingy."  Once we do that, if you are not using a current version of your browser (Internet Explorer is the most common culprit), you will get an error message when you try to access one of these websites.  So the tech tip is simple:  make sure you are using the most current version of your browser and you will be good to go.

Update on Miami-Dade Ordinance. 

Miami-Dade Ordinance 18-12 has been amended again and appears headed for passage after being approved unanimously on first reading Jan. 23rd.  Thanks to the input from FLTA and others, the objectionable provision requiring a statement and buyer’s signature on deeds has been stricken in its entirety.  It will likely come up for final reading in March and implementation will take place 90 days after approval.  The affected section of the Miami-Dade Code is 18-20.2.

The ordinance currently requires a cautionary statement in developer contracts that the property is subject to assessments due to being included in an existing or proposed special taxing district within the county.  The ordinance will expand the requirement to ALL residential real property sales contracts to include the statement if applicable.  The requirement will be triggered when the prior year’s tax bill reflects a special assessment levied for improvements or services within the special taxing district.

When required, the statement must appear in the contract or an addendum to the contract and read as follows:

THE PROPERTY WHICH IS THE SUBJECT OF THIS TRANSACTION IS LOCATED WITHIN ____________________ SPECIAL TAXING DISTRICT CREATED BY MIAMI-DADE COUNTY (OR PROPOSED TO THE BOARD OF COUNTY COMMISSIONERS) FOR THE PURPOSE OF PROVIDING LOCAL IMPROVEMENTS AND SERVICES IN THE NATURE OF _____________. THE COSTS FOR PROVIDING SUCH IMPROVEMENTS AND SERVICES SHALL BE PAID BY SPECIAL ASSESSMENTS LEVIED AGAINST PROPERTIES WITHIN THE DISTRICT. SAID SPECIAL ASSESSMENTS MAY BE COLLECTED AT THE SAME TIME AND IN THE SAME MANNER AS AD VALOREM TAXES.

Although it seems odd that “(OR PROPOSED…)” is part of the statement it is because the same statement is required in developer contracts and they do not have the luxury of waiting for it to appear on a tax bill before they are required to use it.

Here is a link to the full text of the ordinance

02/28/2019