Special offer

Colorado's New Title Insurance Regulations

By
Real Estate Agent with Real estate agent at Oak Real Estate

OK, I'll just say it: title insurance is one of the most boring aspects of a home purchase.  Commitments are often full oflegalese, indecipherable disclaimers and exceptions to exceptions. Effective May 1, 2010, there is a new version of Colorado Division of Insurance Regulation 3-5-1, adopted with the goal of protecting consumer interests.  From what I can tell, it's not going to make title insurance any easier to understand or any more interesting.  In a nutshell, the amended regulation lays out more specific guidelines about how title companies can set their fees, and gives examples of disallowed sources of income for the title companies.

One of the changes which will immediately cause a stir is that the law prohibits title companies from providing ownership and encumbrance reports (O&Es) without charge.  Ironically enough, the press release from the Department of Regulatory Industries states that O&Es "represent a considerable expense for the title industry, expenses that are passed back to consumers in the form of higher premiums and closing fees."  However, the amended regulation does not cap what can be charged for O&Es, nor does it require that the "higher premiums and closing fees" be lowered in light of the fact that title companies must now charge for issuing O&Es.  Hmmm. . . unless premiums and closing fees are reduced in proportion to the amount that the title company will now charge for issuing an O&E, it sounds to me like just another new fee!

You can read the Denver Business Journal's 4/28/10 article about the changes and to see the Department of Regulatory Agencies' press release, or read the full regulation 3-5-1 here.  Warning: do not read before operating heavy machinery!

Posted by

Boulder County REALTOR

www.oconnellhomes.com

303-868-3957

Comments (4)

Rob Proctor
At Home Real Estate Company - Loveland, CO
GRI ePro

yep you are correct another new fee...

May 08, 2010 08:48 AM
Mark Gordon
Christiania Realty, Inc - Vail, CO

I understand the logic behind the regulation changes.  But as you described, I don't think it will be effective.  Maybe they will change back after they realize this......

May 10, 2010 11:04 AM
Ann O'Connell
Real estate agent at Oak Real Estate - Boulder, CO

Rob and Mark - we'll have to see how this plays out. I just hate to see any more "nominal" charges!

May 12, 2010 06:18 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Title "insurance" is a necessary evil.  If there wasn't insurance on the title, then someone could make a claim on title for an unrecorded deed.  I get that, and lenders won't loan funds WITHOUT title insurance.  But, when have you ever heard of a claim being filed against the title insurance for an issue?  In other words, they are collecting a heck of a lot as it is without paying any real, substantional claiams ('cause they're aren't many) . . . and they want more fees?!?

May 17, 2010 11:32 AM