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Friday, October 17, 2014

Supreme Court Ends "Witness Only Closings"

As a real estate attorney, I often advise people of what to look out for when closing on a home. Last spring, I wrote a blog post warning people about the risks of "witness only closings" (click here to read the original blog post).    

As it turns out, I'm not alone in that opinion. On September 22, 2014, the Georgia Supreme Court agreed with me that these types of closings are bad business. 

In a "witness only closing" the lawyer merely presides over the execution of the closing documents, including the deed. These types of closings can lead to foreclosure fraud, title problems and other errors that might not be discovered until years later. 

In their decision, the Supreme Court ruled that a Georgia lawyer may not ethically conduct a "witness only closing." The Supreme Court added that the closing attorney has an obligation to review, revise, approve and adopt documents used in a real estate closing during the entire closing, not just the execution of the documents. 

What's usually included in a real estate closing? While it may vary, it typically consists of at least the following:  

  1. Issuing a title opinion.  
  2. Resolving problems with title.  
  3. Preparation of deeds and any other documents.  
  4. Overseeing the execution of the deeds and closing documents.  
  5. Properly recording the deeds and all other documents.  
  6. Receiving, depositing, and disbursing all funds. 

I am pleased that the Supreme Court has agreed with what most real estate attorneys have believed for years - "witness only closings" are bad business. All closings, no matter how simple or complex, should only be handled by an experienced closing attorney. 

For more information on this topic, email Scott Mayfield at smayfield@smithwelchlaw.com or call him at 770-358-3630. Smith, Welch, Webb and White is recognized as a premier law firm throughout the state of Georgia. We have an uncompromising commitment to serving our clients and our community. Our team of experts routinely handles a wide range of legal matters, and will provide outstanding service for you, your family or your business.

 

Any representations regarding the law in this Blog is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog publisher. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.


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