To follow up on my last blog post, I have to believe that every attorney who practices has been confronted with the statement “but I’ve never had to do it that way before”. Please believe that despite the image of attorneys driving up costs for their clients, most real estate attorneys are working off of a fee-based system and generally do not want to create unnecessary work or delays for themselves or others.
- Disbursements
I know there are some attorneys now or in the past who would wink and pass along one or more checks at the closing table before the ink was dry on the deed and long before the documents were recorded. Perhaps this was done as act of kindness or perhaps to save the time and difficulty of arranging for folks to pick up those proceeds after recording later in the day. If your closing attorney is having you wait until the documents are recorded in North Carolina, they are simply following the law. North Carolina General Statute 45A-4(a) which explains the duty of a settlement agent (i.e. your closing attorney) requires the attorney to record (and use a portion of funds for recording purposes) before releasing any funds.
- Operating Agreement / Bylaws / Trust Agreement / Power of Attorney
In the legal realm there are many document types which provide power to others. I only listed a select few in the heading to this paragraph. If you are signing a document at my office, I will verify your identity to confirm that you, the person standing before me, has the authority to sign your name as indicated on the document in front of me. A simple government-issued photo ID will suffice for an individual. However, if you tell me you are the president of ABC, Inc. (which probably exists) and you are signing under your capacity as a president for that entity, I cannot confirm that without a copy of your bylaws which list your title and explains what you can do. This is the same if you are a manager of a limited liability company, a trustee under a trust, or an agent under a power of attorney. The “but I’ve never had to do it that way before” moment exists because there are attorneys who have a client relationship with a business or individual and are comfortable with certifying that business’s or person’s authority. Not everyone you deal with may have that familiarity with you or your company. My end goal in requesting these documents is to ensure the transaction is done 100% correctly with the right authority. Doing things correctly the first time in real estate can take extra time but it saves a ton of time that it takes to fix a problem after the fact.