On April 3, 2018, the Title Insurance Division of the Illinois Department of Financial and Professional Regulation (“IDFPR”) proposed a new disclosure form to be executed by title insurance agents and underwriters when title insurance is referred by a “producer” as defined under the Title Insurance Act. The form had an effective date of April 4, 2018. The implementation date has been indefinitely postponed while key stakeholders in the Illinois legal, real estate and title insurance communities work together to accomplish the IDFPR’s important objective of improving consumer transparency, while ensuring that consumers have reasonable access to legal counsel in real estate transactions. The parties were unable to agree on several key points, prompting the Illinois Land Title Association (“ILTA”), Attorney’s Title Guarantee Fund, Inc. (“ATG”), Greater Illinois Title (“GIT”) and others to seek injunctive and other relief to prevent the proposed form from being implemented.
At issue is the disclosure form, the DS-1, that attorneys must give clients regarding the controlled business relationship between title companies and attorneys representing sellers. The DS-1 seeks to make fee sharing between title companies and attorneys transparent. Byrne Law is in favor of such transparency and believes consumers have a right to understand their real transactional costs. However, the proposed form has several issues that need to be resolved, including protection of the sanctity of the attorney-client relationship.
On June 29, 2018, the Honorable Thomas Allen granted a Temporary Restraining Order and granted injunctive relief preventing the IDFPR from implementing the proposed DS-1 form. The court felt that ILTA, ATG, GIT and others “raised fair questions” regarding the new DS-1 Form, and noted that “the attorney-client relationship is sacred and confidential” when discussing attorney ’s fees being included on the New DS-1 Form.
In the interim, until he court can hear and rule upon the merits of the case, Judge Allen ruled that the old DS-1 form should continue to be used, as it does provide protection and transparency for consumers.
A new hearing date has been set for September 26, 2018.
Byrne Law will continue to provide news and updates on matters affecting the Illinois real estate community. If you have further questions, please contact Sean Byrne.