Unlawful Rebates - Estoppel DFS Clarification

An updated clarification letter was issued February 11, 2016 from the Department of Financial Services to address the issue of advance payment by a title insurance agent for estoppel certificates.

Rule 69B-186.010 interpreting Florida Statutes Subparagraph 626.9541(1)(h)3, which went into effect February 9, 2016, and the Department of Financial Services letter dated February 5, 2016 had caused confusion for the last couple of days over whether a title agent could advance the cost of obtaining an estoppel certificate. The response from the Department makes the following clarification:

“The Department believes that it is a violation of subparagraph 626.9541 (1) (h)3., Florida Statutes, and subsection 69B-186.010(4)(a), Florida Administrative Code, for a title insurance agent and/or agency to pay for an estoppel certificate without being reimbursed for the expenditure. However, if a title agent and/or agency pay for an estoppel certificate, and the title insurance agent or agency is reimbursed at closing for the estoppel certificate; such advance payment for the estoppel does not constitute an ‘unlawful rebate.’”

SETCO Services, LLC will continue to advance the cost of estoppel certificates in order to continue streamlining the closing process for buyers and sellers. If a closing does not occur and SETCO Services, LLC has advanced any funds for estoppel certificates then they must be collected from the responsible party. Please assist us in continuing to best serve buyers and seller of real property by reminding your clients of the legal implications if they do not reimburse the title agent when a closing falls through.

We appreciate your business and will continue to provide the most up to date information!

- Your SETCO Team

Read the Official Letter Here - DFS Clarification February 11,2016