"Busy" Doesn’t Mean It’s Okay To Ignore Important Things

Mike Kennedy's recent blog post reported on two real estate attorneys who received Public Reprimands for matters related to trust accounting and the issuance of title insurance. As Mike stated: “The failure to mind the trust account will result in discipline”. The full post is here: Back to (trust account) school. – Ethical Grounds (wordpress.com)

Mike’s summary of the two Decisions is here. These are not the only decisions addressing these very important issues BUT the “big deal” about them is that they represent a “step up” in sanctions from Private Admonition to Public Reprimand. The next level of sanctions is Suspension. If your firm fits the description below, we recommend immediate resolution.

PRB Decision 236 involved a solo practitioner with a focus on residential real estate transactions. A disciplinary complaint resulted in Disciplinary Counsel conducting a compliance audit of the lawyer’s trust account. The audit revealed that the account often went unreconciled, and to the extent that the lawyer maintained records, they were substandard. Among other things, the lack of regular reconciliation caused the lawyer to fail to account for numerous uncashed checks that had been issued against the trust account.  
In addition, the lawyer is a title insurance agent. In that role, title insurance premium is collected at closing and deposited into a trust account. Following the closing, the lawyer conducts a title update so that a final policy can issue. Then, the lawyer disburses both the title insurer’s share of the premium and the lawyer’s share.
Here, the lawyer wasn’t doing that. Rather, the lawyer admitted that there were approximately 30 closings at which the lawyer had collected the title insurance premium but not issued a final policy or disbursed the title insurance company’s share of the premium. The former is bad because it’s neglect, the latter is bad because, in this situation, the title insurance company is no different than any other person who is entitled to funds that an attorney is holding in trust.
PRB Decision 235 involved a lawyer at a small firm whose practice focused on estate planning and residential real estate. A compliance audit of the firm’s trust accounts revealed problems associated with years of failing to reconcile the accounts. Thus, accounting errors and uncashed checks went undetected. 
In the end, a hearing panel concluded that the presumptive sanction was a Public Reprimand. The panel also found that the mitigating factors outweighed the aggravating, and that many of the problems with the firm’s trust accounting pre-dated the lawyer’s responsibility for the accounts. Still, the panel opted against reducing the sanction from reprimand to admonition, noting that the lawyer “allowed those problems to languish and was directly responsible for repeated failures to conduct reconciliation and for failing to address and correct accounting errors that arose . . .”  
Ransomware Takes Downs Cloudstar In Crippling Attack
We have seen several ransomware attacks target companies of an IT nature. These attacks remind us of the vulnerabilities of our network systems, and of the need to implement measures to protect them.

Please click here to read this very informative article.
SBA Loans (Granite State Economic Development Corp.) - Policy Preparation

In addition to other requests, we recently learned that the SBA is requesting that the following statement be included at the end of the Schedule B, part I, Exceptions, "Condition 13, Arbitration is deleted from the final loan policy."

Please visit the VATC website for additional information to be included in these policies and to view other policy preparation tips.

Policy Remittance - Reminder

In an effort to streamline policy processing at CATIC, please adhere to the following when remitting policies and premiums to our office:

Only remit:
•  Schedules A, B (and, if applicable, B-II)
•  Continuation sheets
•  Property description
•  Endorsements
•  Transmittal form
•  Remittance check(s)*

Please do not remit: Anything else (e.g. cover letters, policy jackets or the CATIC Financial Privacy Policy attached to the OP!)

*Insert the Policy Number on both the transmittal form and the remittance check(s).

Thank you for helping the policy processing team at CATIC. Questions? Please call the VATC office, 800.649.3366 or 802.876.6800
Lau's Corner & Title Tips

Town Clerks

We are hearing more and more about Clerks requiring appointments again, wearing masks and modifying hours. Please, please, please do not rely on our website or Town Clerk Directory for hours of operation. We do not always hear of the changes. Please remember to call first.

What we do know: The Town of Hartford will be closed on Fridays through October 8th.