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G AM E S HOW

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© 2017 Fidelity National Title Group | Florida Agency Operations

FIDELITY NATIONAL TITLE INSURACE COMPANY ULTIMATE GAMESHOW WEBINAR

One Credit Hour (50 minutes speaking time)

This presentation will be in a game show format using questions with multiple choice answers, followed by an explanation of the answer. Each question and explanation will last approximately 5 minutes each, for a total speaking time of 50 minutes.

I. Notarial Acts A. Acknowledgement v. Jurat, see Section 117.05(13), F.S.

II. Data Security A. Examples of strong passwords B. General Password Best Practices

1. Don’t share your password 2. Don’t write it down 3. Don’t use “Password” as your Password.

III. Homeowner’s Equity Line of Credit (HELOC) Payoffs: Title Insurance Underwriting Requirements A. Notify the lender and close the equity line loan in writing using “freeze” language B. An updated payoff figure obtained no more than 2 days prior to closing C. Bulletins 2012‐05 and 2011‐02

IV. Escrow Reconciliation Documentation, Verification and Review A. Section 690.186.009, F.S. B. Importance of a Three‐Way Reconciliation C. State Requirements and Florida Bar Requirements

V. Probate and Transfer of Homestead Property A. Sections 733.607 and 733.608, Florida Statutes B. Title was vested in the decedent C. Title was vested in the decedent as trustee of decedent’s revocable trust Aronson v. Aronson, 81 So. 3d 515 (Fla. 3d DCA 2012).

VI. American Land Title Association Title Insurance And Settlement Company Best Practices (“ALTA Best Practices”) A. Best Practice #1 – Licensing B. Best Practice #2 – Escrow Trust Accounts C. Best Practice #3 – Information and Data Privacy D. Best Practice #4 –Settlement Procedures E. Best Practice #5 – Title Policy Production F. Best Practice #6 – Insurance G. Best Practice #7 –Consumer Complaints

VII. Bankruptcy and Money Judgments A. Bankruptcy does not eliminate the lien of a judgment on real property that the debtor

owned prior to filing bankruptcy B. Bankruptcy does discharge the debtor of personal liability

VIII. Legal Description Issues A. Monumentation vs. Measurement B. Rules of Construction/Priority of Calls

IX. Execution of documents by officers on behalf of a Limited Liability Company A. Sections 605.0109(8) and 605.04071, Fla. Stat.

© 2017 Fidelity National Title Group | Florida Agency Operations

B. Underwriting Bulletin 2016‐08 X. Cyber Fraud ‐ What to Do If You’re the Victim

A. Underwriting Confidential Alert 2017‐001 B. U.S. Department of Justice Best Practices for Victim Response and Reporting of Cyber

Incidents C. FBI’s Internet Crime Complaint Center’s Business Email Compromise Alert I‐082715a‐

PSA

Page | 1 © 2017 Fidelity National Title Group | Florida Agency Operations

Question 1: Notarial Acts Chuck Woolery and his wife are selling real property in Florida. Chuck presents a Power of Attorney from his wife as Principal appointing Chuck as attorney-in-fact. The POA contains a jurat in lieu of an acknowledgment. Can Chuck use the POA to execute a deed on behalf of his wife?

A. Yes

B. No

Notarial Acts

When you notarize a signature, you must perform one of two notarial acts: take an acknowledgment or administer an oath. These two acts have different purposes.

An acknowledgment is defined as “a formal declaration made in the presence of an authorized officer, such as a notary public, by someone who signs a document and confirms the signature is authentic.” See Black’s Law Dictionary, 9th edition, 2009. To take an acknowledgment, the document signer must personally appear before you, as the notary, and declare that he or she signed the document or he or she must sign the document in front of you. For example, you may ask “Do you acknowledge that this is your signature and that you are executing this document of your own free will?” Typical documents that require an acknowledgment are deeds, mortgages and powers of attorney.

Sample Acknowledgment STATE OF FLORIDA COUNTY OF ______________ The foregoing instrument was acknowledged before me this _______ day of _________, (YEAR), by _(NAME OF PERSON ACKNOWLEDGING)__.

Signature of Notary Notary Printed Name

Personally Known ____ OR Produced Identification _____ Type of Identification Produced _________________________

In contrast, an oath is “a solemn declaration, accompanied by a swearing, that one’s statement is true.” See Black’s Law Dictionary, 9th edition, 2009. The oath is administered to a document signer when that signer is required to make a sworn statement about certain facts. The signer personally appears before you, as the notary, and they swear to you that information contained in the document is true. This means there should be a verbal exchange between the notary and the document signer where the signer indicates they are taking an oath. For example, you may ask, “Do you swear that the information contained in this document is true?”

Sworn statements are commonly used in affidavits and depositions. The clause at the end of an affidavit is referred to as a jurat. Jurats differ from acknowledgments in that they are evidence of a sworn statement, not merely evidence of the execution of an instrument. The notary public may not take an acknowledgment in lieu of an oath if an oath is required. See section 117.03, Florida Statutes.

The legal effect of an oath is to subject the person to penalties for perjury if the testimony is false. See Black’s Law Dictionary, 9th edition, 2009. In other words, a person who makes a false oath is subject to criminal charges for perjury. In Florida, penalties exist for false swearing to an affidavit. § 92.525, Fla. Stat.


Sample Jurat STATE OF FLORIDA COUNTY OF ______________ Sworn to (or affirmed) and subscribed before me this _______ day of _________, (YEAR), by _(NAME OF PERSON MAKING STATEMENT)__.

Signature of Notary Notary Printed Name

Personally Known ____ OR Produced Identification _____ Type of Identification Produced _________________________

Which Form Should I Use?

For title insurance purposes, real property documents, such as deeds and mortgages, must be acknowledged using the proper form of acknowledgment and not a jurat. In contrast, affidavits, such as a Continuous Marriage Affidavit or a Homestead Affidavit, must use the jurat form for taking an oath. Be careful when using the cut and paste method as a shortcut for document creation – be sure to cut and paste the correct form of acknowledge or oath.

Question 2: Data Security After a contestant on Family Feud regaled Steve Harvey with a tale of identity theft, he has decided that he needs to rethink all of his online passwords so that they are more secure. Which are the following is the most secure password Steve could use?

A. password

B. passw0rd$

C. Fdh2mf0+a

D. $eattle123

Keeping Passwords Safe

When passwords to your work email or closing software are compromised, so too are the privacy and safety of all of the clients whose files are discussed in your emails or worked on in your closing software. To avoid this type of unintentional confidentiality breach, here are a few password tips:

Don’t use “Password” as your Password. The most common passwords are: o Password o 123456 o QWERTY o 111111 o Monkey

Do not use the same password for every program or website Use mixed characters (upper/lower case, numbers, characters) when creating passwords Change passwords frequently Avoid personal details The longer the password, the better Every password for every site should be different Store passwords in a secure location – consider using a secure password management program to

accomplish this and DON’T WRITE IT DOWN! Random letters and numbers work best.


PASSWORD DOS AND DON’TS Do use a combination of uppercase and lowercase letters, symbols and numbers

Don’t use 12345, the word “password” or any of the other examples previously mentioned

Do make sure your passwords are at least eight characters long – the more characters your passwords contain, the more difficult they are to guess

Don’t use one word passwords. Hackers have dictionary based tools to crack these types of passwords

Do try to make them as random and meaningless as possible

Don’t use a derivative of your name, the name of a family member or a pet

Do use different passwords for each account Don’t write them down and don’t share them

Do change them regularly Don’t answer “yes” when prompted to save them to a browser.

How to Choose a Better Password

1. Begin by creating a password phrase that you will customize for each website you use. For example:

I want to go to Scotland

2. Next, convert this phrase to an abbreviation by using the first letters of each word and changing the word "to" to a number "2." This will result in the following basic password phrase: iw2g2s.

3. Then add the first and last letter of the website you are using on your new password phrase. For example, if you want to create a password for FNTGFlorida.com, Fiw2g2eA is your new unique and complex password.

The advantage of using a pass phrase such as the above is that it is easy to remember as it’s something personal to you, but something that you can make unique for each website you visit requiring a login.

Question 3: Equity Lines of Credit Bob Barker is selling his beachfront bungalow in Naples. A title search reveals an outstanding home equity line of credit in the amount of $35,000. You obtain Bob’s authorization to request a payoff and require his credit card be returned to the bank. You also request an updated payoff amount two days prior to closing and will include his authorization to close the account with the payoff funds. You have met all the underwriting requirements to close, right?

A. Right, be sure to get pictures and autographs at closing

B. Wrong, you must obtain an updated payoff immediately before closing to ensure a zero balance

C. Right, there’s nothing special about an equity line

D. Wrong, the payoff request should include language requesting that the account be frozen upon issuance of the payoff letter

Equity Lines of Credit (HELOCs)

Language similar to the following would be sufficient:

In the event this loan is secured by a Mortgage allowing for advances of a credit line, please be advised that this letter authorizes you to freeze the referenced credit line upon issuance of your payoff letter. If you require further authorization, please contact the undersigned immediately. Payment pursuant to your payoff letter will eliminate any security interest you have in the property in question. In order to avoid unsecured additional advances the account must be frozen upon issuance of your payoff letter. If you make any additional advances they will not be secured by the subject property. We will be completing an escrow/closing transaction involving a new owner or lender in reliance on


the release of your security interest in the property. Upon payment you will be obligated to issue a release of the Mortgage securing the line of credit.

Because the account may still be open and used by the borrowers (even after closing) the account must be frozen at the time of the estoppel request. See FNTG Bulletins 2012-05 and 2011-02 for additional details.

Question 4: ALTA Best Practices Which of the following is not an ALTA Best Practice?

A. Consumer Complaints

B. Licensing

C. Title Policy Production

D. All of the above are Best Practices

Best Practice 1 - Licensing

Establish and maintain current License(s) as required to conduct the business of title insurance and settlement services.

Purpose

Maintaining state mandated insurance licenses and corporate registrations (as applicable) helps ensure the Company remains in good standing with the state.

Best Practice 2 - Escrow Account Controls

Adopt and maintain appropriate written procedures and controls for Escrow Trust Accounts allowing for electronic verification of reconciliation.

Purpose

Appropriate and effective escrow controls and staff training help title and settlement companies meet client and legal requirements for the safeguarding of client funds. These procedures help ensure accuracy and minimize the exposure to loss of client funds. Settlement companies may engage outside contractors to conduct segregation of trust accounting duties.

Best Practice 3 - Information & Data Privacy

Adopt and maintain a written privacy and information security program to protect Non-public Personal Information as required by local, state and federal law.

Purpose

Federal and state laws (including the Gramm-Leach-Bliley Act) require title companies to develop a written information security program that describes the procedures they employ to protect Non-public Personal Information (NPI). The program must be appropriate to the Company’s size and complexity, the nature and scope of the Company’s activities, and the sensitivity of the customer information the Company handles. A Company evaluates and adjusts its program in light of relevant circumstances, including changes in the Company’s business or operations, or the results of security testing and monitoring.

Best Practice 4 – Settlement Policies & Procedures

Adopt standard real estate settlement procedures and policies that help ensure compliance with Federal and State Consumer Financial Laws as applicable to the Settlement process.

Purpose

Adopting appropriate policies and conducting ongoing employee training helps ensure that a real estate settlement company can meet state, federal and contractual obligations governing the settlement process and provide a safe and compliant settlement.


Best Practice 5 - Title Policy Production

Adopt and maintain written procedures related to title policy production, delivery, reporting and premium remittance.

Purpose

Adopting appropriate procedures for the production, delivery and remittance of title insurance policies helps ensure title companies can meet their legal and contractual obligations.

Best Practice 6 - Insurance

Maintain appropriate professional liability insurance and fidelity coverage.

Purpose

Appropriate levels of professional liability insurance or errors and omissions insurance help ensure title agencies and settlement companies maintain the financial capacity to stand behind their professional services. In addition, state law and title insurance underwriting agreements may require a company to maintain professional liability insurance or errors and omissions insurance, fidelity coverage or surety bonds.

Best Practice 7 - Consumer Complaints

Adopt and maintain written procedures for resolving consumer complaints.

Purpose

A process for receiving and addressing consumer complaints helps ensure reported instances of poor service or non-compliance do not go undiscovered.

Online Resources

For more detailed information on any of these best practices, you can visit FNTG’s Best Practices Portfolio at https://www.fntgflorida.com/education/training-resources/alta-best-practices-resources/ or ALTA’s website www.alta.org.

Question 5: Probate and the Transfer of Homestead Dick Clark died owning homestead property, the fee simple title being vested in Dick Clark as Trustee of the Dick Clark Revocable Trust dated November 30, 2001. At his death, he was survived by a spouse and three adult children. The terms of the trust provide that upon Dick’s death, his surviving spouse receives a life estate interest in the homestead with remainder passing to one of the adult daughters.

You have been asked to insure a sale to a BFP. You should require a conveyance from:

A. The successor trustee of the Dick Clark Revocable Trust dated November 30, 2001

B. The successor trustee of the Dick Clark Revocable Trust dated November 30, 2001, the surviving spouse, the three adult children

C. Surviving spouse

D. Surviving spouse and three adult children

Probate and Transferring Homestead

Where no minor child survived the decedent, but decedent was survived by a spouse, the only permitted devise is of all decedent’s interest in the home absolutely. As the devise to the spouse was not a devise of the fee simple interest in the property, it was an invalid devise of the homestead. If the interest in homestead is not devised as permitted by Article X, § 4(c), of the Florida Constitution and section 732.4015, Florida Statutes, then the interest in the homestead will pass intestate under sections 732.401, 732.102 & 732.103 Florida Statutes.

Florida law provides that homestead property is not subject to devise by will if the owner was survived by a spouse or minor child, except that it is subject to devise to the spouse if the owner had no minor child. Art. X, § 4(c), Fla.


Const. and § 732.4015, Fla. Stat. If an owner of an interest in homestead is survived by a minor child, the homestead cannot be devised. The term "owner" in section 732.4015, Florida Statutes, also includes the grantor/settlor of a revocable trust. Further, the term “devise” includes a disposition by trust. In other words, the trust is the equivalent of a will and the owner cannot circumvent Florida law regarding homestead by placing homestead property in a revocable trust. In re: Estate of Johnson, 397 So. 2d 970 (Fla. 4th DCA 1981). Thus, if the deceased was survived by a spouse or minor child, the terms of the trust agreement may not govern disposition of the homestead. Aronson v. Aronson, 81 So. 3d 515 (Fla. 3d DCA 2012).

A personal representative can take charge of non-homestead property, and non-protected homestead property as assets of the estate. The personal representative can convey that real property pursuant to a court order authorizing the sale, or powers granted under a last will and testament.

Question 6: Escrow Reconciliation Gordon Ramsey became burned out on television fame and decided to become a bookkeeper at the Hell’s Kitchen Title Agency. It’s the end of his first month, and he is getting ready to send his monthly escrow reconciliation package to FNTG. He wants to make sure he includes everything that is statutorily required. Which of the below items is not required to be included in the reconciliation package?

A. Each closing file’s ledger card

B. Trial balance

C. Bank statement

D. List of all outstanding deposit and disbursement transactions

ALTA Best Practice #2: Escrow Account Controls

Adopt and maintain appropriate written procedures and controls for Escrow Trust Accounts allowing for electronic verification of reconciliation.

Purpose

Appropriate and effective escrow controls and staff training help title and settlement companies meet client and legal requirements for the safeguarding of client funds. These procedures help ensure accuracy and minimize the exposure to loss of client funds. Settlement companies may engage outside contractors to conduct segregation of trust accounting duties.

What You Should Know

Lenders are understandably concerned about the proper disbursement of loan funds held in the Escrow Trust Accounts of third party settlement agents. Title insurance underwriters issuing Closing Protection Letters (CPLs) to lenders also have a vested interest in the methods used by their policy issuing agents to safeguard and disburse funds held in Escrow Trust Accounts.

Procedures to Meet This Best Practice

Escrow funds and operating accounts are separately maintained.

o Escrow funds or other funds the Company maintains under a fiduciary duty to another are not commingled with Company’s operating account or an employee or manager’s personal account.

Escrow Trust Accounts are prepared with Trial Balances.

o On at least a monthly basis, Escrow Trust Accounts are prepared with Trial Balances (“Three-Way Reconciliation”), listing all open escrow balances.

Escrow Trust Accounts are reconciled.

o On at least a daily basis, reconciliation of the receipts and disbursements of the Escrow Trust Account is performed.


o On at least a monthly basis, a Three-Way Reconciliation is performed reconciling the bank statement, check book and Trial Balances.

o Segregation of duties is in place to help ensure the reliability of the reconciliation and reconciliations are conducted by someone other than those with signing authority.

o Results of the reconciliation are reviewed by management and are accessible electronically by Company’s contracted underwriter(s).

Escrow Trust Accounts are properly identified.

o Accounts are identified as “escrow” or “trust” accounts. Appropriate identification appears on all account-related documentation including bank statements, bank agreements, disbursement checks and deposit tickets.

Outstanding file balances are documented.

Transactions are conducted by authorized employees only.

o Only those employees whose authority has been defined to authorize bank transactions may do so. Appropriate authorization levels are set by Company and reviewed for updates annually. Former employees are immediately deleted as listed signatories on all bank accounts.

Unless directed by the beneficial owner, Escrow Trust Accounts are maintained in Federally Insured Financial Institutions.

Utilize Positive Pay or Reverse Positive Pay, if available in the local marketplace, and have policies and procedures in place that prohibit or control the use of Automated Clearing House transactions and international wire transfers.

Background Checks are completed in the hiring process. At least every three years, obtain Background Checks going back five years for all employees who have access to customer funds.

Ongoing training is conducted for employees in management of escrow funds and escrow accounting.

Reconciliations

In Florida, title insurance agents must perform a three-way reconciliation of their Escrow Trust Accounts and submit them to their underwriters on a monthly basis. Escrow Trust Accounts with any outstanding balances, even if considered inactive, must be reconciled on a monthly basis.

Specific requirements are set forth in The Florida Bar Rules Regulating Trust Accounts and Rule 69O-186.009, Florida Administrative Code. Using a third party service to perform escrow reconciliations is often recommended to achieve segregation of duties in a smaller operation or for efficiency in larger operations.

However, the ultimate responsibility for the accuracy of the reconciliations rests with the title insurance agent, not the third party performing reconciliations. Management should routinely review and approve all reconciliations.

Escrow Account Requirements

State of Florida and The Florida Bar

There are two sources for the escrow account requirements imposed upon all title agents - the State of Florida and The Florida Bar. The Florida Statutes and the Florida Administrative Code contain laws and regulations which impact agents and agencies licensed by the Department of Financial Services, as well as attorneys. In addition, The Florida Bar imposes certain requirements on its attorney members. The statutes set forth the law, whereas the rules and regulations which comprise the Florida Administrative Code are established to interpret the statutes and provide more detail to address specific situations.

For example, Sections 626.8473 (4) and (5), F.S., apply to all title agents and state as follows:


(4) Funds required to be maintained in escrow trust accounts pursuant to this section shall not be subject to any debts of the title insurance agent and shall be used only in accordance with the terms of the individual, escrow, settlement, or closing instructions under which the funds were accepted.

(5) The title insurance agents shall maintain separate records of all receipts and disbursements of escrow, settlement, or closing funds.

The statutes indicate that funds must be maintained within escrow trust accounts and that title insurance agents must maintain separate records for all escrow funds, but there is no detail about how to maintain the accounts and records. Rule 69O-186.009, F.A.C., which applies to licensed title insurance agents, that states that a monthly reconciliation package must be prepared and forwarded to all of the title agent’s underwriters. This reconciliation package must include:

the bank statement;

a list of all outstanding deposit and disbursement transactions; and

a trial balance.

The regulations also require that these records be held by licensed title agents for a period of five years and be available upon request. In addition, separate ledger cards must be kept for each real estate closing that documents dates, names, amounts, and check numbers. This information may be stored within a computer accounting system, but only has to be kept for a period of three years. Again, this information must be available upon request.

The Supreme Court of Florida has enacted Rules Regulating The Florida Bar, establishing The Florida Bar as the official arm of the Court and giving it the authority and responsibility for oversight of all attorneys licensed to practice in Florida. Rule 5 contains the trust account rules, and Rule 5-1.2 states the minimum requirements attorneys must follow for trust accounting records maintenance and trust accounting procedures. All trust accounts managed by an attorney must be reconciled, disclosing the ending bank balance, deposits in transit, outstanding checks (by date and check number), and any other information necessary to reconcile the ending bank balance to the check book register balance. Additionally, the attorney is required to verify that this reconciled balance matches the trial balance total, documenting the reason for any discrepancies.

Although attorneys are not required by law to submit escrow reconciliations to their title underwriters on a monthly basis as licensed title insurance agents are required to do, title underwriters usually include this requirement within their agency contract. While Rule 5 is the minimum compliance standard, we always recommend that our attorney agents provide additional information on the outstanding check report and include the closing file number and payee information. This data is helpful when researching outstanding checks so that the escrow funds can be properly disbursed in the future. Most accounting software systems include this information on the generated reports.

Question 7: Bankruptcy and Money Judgments Gameshow Gayle overspent her winnings from Who Wants to be a Millionaire and numerous creditors obtained money judgments against her. Certified copies of the judgments were recorded in the Official Records where she owned non-homestead property that she purchased prior to filing bankruptcy. She filed Chapter 7 bankruptcy, properly scheduled the judgment liens and she now wants to sell the property. What is required with respect to the judgment liens to insure?

A. Record certified copies of the bankruptcy petition and the discharge

B. Nothing, only uncertified copies of money judgments attach as liens to real property

C. Title is not marketable. She can never sell the property

D. Releases or satisfactions of the judgments must be recorded


A bankruptcy only operates to relieve a debtor from personal liability for dischargeable debts. It does not remove or release any lien or mortgage from real property owned by the debtor prior to filing bankruptcy unless a specific court order is entered removing the lien or mortgage. Additionally, a judgment or other lien not shown in bankruptcy schedules remains as an exception to title.

Question 8: Legal Description Issues Vanna White, unsatisfied with her days of turning letters and wearing fancy dresses, has recently become a title agent. On her first file, she notices that the legal description on the vesting deed of her property states that the West line of the property runs 205 feet Northerly to the South line of Fortune Avenue. Upon reviewing the survey, the actual distance of the West line of the property is 270 feet. The vesting deed lists the correct parcel ID. Does Vanna need to file a corrective instrument to deal with the legal description discrepancy?

A. Yes, 270 feet is way more than 205 feet

B. No, Based on the rules of construction, a reference to an artificial monument controls over reference to a distance

C. Yes, A road is not an artificial monument

D. No, The parcel ID controls the reference to a distance

Rules of Construction

Courts will often employ Rules of Construction to resolve inconsistencies and ambiguities in legal descriptions. This common sense hierarchy is also utilized by examiners, searchers, and surveyors to determine the scope of a description defect. An error in a property description does not render the instrument uninsurable if the property can be located with certainty by applying these established rules of construction, or clarified by the execution of an Affidavit. The title policy should always contain the correct description.

Surveyors and title examiners rely upon rules of monumentation to solve potential discrepancies. A monument is “a man-made or natural object that is presumed to occupy the corner or is a reference to the position of a corner.” Section 177.503, F.S. The most reliable monuments are those monuments which are permanent and easily locatable by a surveyor. “Monuments on the ground are the best evidence of the actual survey and control over defects and inconsistencies in any plat of survey or written description of the survey.” O’Berry v. Gray, 510 So.2d 1135, 1137 (Fla. 5th Dist. Ct. App. 1987); See also Tyson v. Edwards, 433 So.2d 549 (Fla. 5th Dist. Ct. App. 1983). Although other types of acceptable monuments may exist, Agents should exercise caution when relying on monuments which may decay or disappear over time.

Assuming there is no clear evidence of a contrary intent, the following priorities may be applied to resolve inconsistencies and ambiguities:

1. Natural Monuments: Natural monuments are those monuments that are found in nature. They include water boundaries such as a river, stream, spring, or lake, or land features such as an oak tree, a boulder, a ditch, a mountain peak or ridge and a valley.

2. Artificial Monuments: Artificial monuments include man-made structures: a road, bridge, highway, interstate, fence, stake(s), or post. They also include marked and surveyed lines, a section corner, section lines, a quarter corner, a boundary line, a stone marker or other permanent markers that have been located and duly witnessed including grant lines, government lot lines, or fractional section lines, platted lot lines, and platted or public street right of way lines.

3. Adjacent Tracts or Boundaries: Adjacent tracts or boundary lines such a reference to “Pat Sajack’s Property” or “The Wheel of Fortune Tract” are often included in the artificial monument category, as well as properties referenced by Map or Plat Book and Page Number.


4. Courses or Directions: Courses may include angles, degrees (˚), minutes (‘), seconds (“) or a directional such as East, West, North, or South

5. Distances: A measurement of distance may be expressed in feet, meters, chains, rods or other unit of measurement such as “300 feet” or “a length of 500 yards”

6. General Descriptions: General descriptions may include an area of the real property such as “Gameshow Island”, “Hollywood Squares Farm” or quantity such as “1 acre.”

Question 9: Execution of Documents by Officers on Behalf of an LLC Jeopardy, LLC a Florida Limited Liability Company owns the Tournament of Champions property and has a contract to sell it to Wheel of Fortune, Inc. Alex Trebec is the CFO of Jeopardy, LLC. Can Alex convey Tournament of Champions?

A. Yes, a CFO has automatic statutory authority to convey title to real property owned by a Limited Liability Company

B. No, Wheel of Fortune is a competitor and cannot purchase real property owned by Jeopardy, LLC. C. Yes, but only if the operating agreement, articles of organization or a statement of authority for

Jeopardy, LLC specifically granted authority to Alex Trebec as CFO to convey D. No, a CFO can never act on behalf of a Limited Liability Company

Conveyances and Mortgages

Instead of officers, an LLC is typically managed by its member(s) or manager(s). The articles of organization and operating agreement, if any, must be reviewed to determine the party authorized to execute instruments on behalf of the LLC. Additionally, if a certified copy of a Statement of Authority is recorded in the official records of the county where the land is located, it must be reviewed.

LLC Document Review

The title agent must review:

1. Articles of organization, and any amendments. Every LLC will have articles of organization, which may be available online. For example, in Florida, the articles of organization are available on the Florida Department of State Division of Corporation’s website – www.sunbiz.org.

2. Online information, if any, in the state of the LLC’s formation.

3. Operating agreement, if any. On occasion, the title agent will be informed that no operating agreement exists. In that situation, the following statement should be included in the LLC affidavit:

Affiant verifies that no operating agreement exists.

It should be noted that this procedure can only be used when the operating agreement does not exist, not when the manager or member fails or refuses to provide a copy of an operating agreement in existence, which raises a red flag that the manager or member may not have the proper authority to convey or mortgage.

Any modification or amendment to the articles of organization, the filing information online or the operating agreement within six months prior to the closing should be treated as potentially fraudulent. Title claims have resulted from forged modifications or amendments to the articles of organization filed with the Florida Secretary of State just prior to closing. For example, the articles may purport to appoint a new manager of the LLC when, in fact, no new manager was ever appointed.


Documents Executed by Officers

Although Florida law permits an LLC to appoint officers such as president and vice president under sections 605.0109(8) and 605.04071, Florida Statutes, no statutory authority exists for those officers to execute documents on behalf of the LLC. Authority must be granted by the LLC’s articles of organization, operating agreement or a statement of authority. The title agent must record an affidavit attaching those relevant excerpts appointing the officer and authorizing the officer’s actions. Alternatively, a recorded resolution executed by all of the members that authorizes the officer to convey or mortgage the LLC property may be relied upon.

Signature Block and Notary Block

The examples below illustrate the language that should appear on deeds and mortgages to convey and encumber LLC property:

Sample Grantor ABC Limited Liability Company, a Florida limited liability company

Sample Signature Block ABC Limited Liability Company, a Florida limited liability company By: John Smith John Smith, Manager

Sample Notary Block

The foregoing instrument was acknowledged before me this ___ day of ________, 20__, by John Smith, Manager of ABC Limited Liability Company, a Florida limited liability company, who is ( ) personally known or ( ) has provided ________________ as identification.

It is not essential for the acknowledgment to show that the signer was acting as manager or member for the LLC. However, as a best practice, the information should be included in the acknowledgment in case the signature block fails to show that the signer is a manager or a member.

Sample Grantor ABC Limited Liability Company, a Florida limited liability company

Sample Signature Block

ABC Limited Liability Company, a Florida limited liability companyBy: ABC, Inc., a Florida corporation, its Member By: John Smith John Smith, its President

Sample Notary Block

The foregoing instrument was acknowledged before me this ____ day of ___________, 20__, by John Smith, as president of ABC, Inc., a Florida corporations, the member of ABC Limited Liability Company, a Florida limited liability company, who is ( ) personally known or ( ) has provided _____________ as identification.


Question 10: CyberFraud Drew Carey received an email from someone claiming to be working with his closer on the upcoming sale of his Hollywood mansion. He was irritated by all of the misspellings and grammatical errors and was a little concerned that his closer would have hired someone who could not compose a proper email. The email needed him to immediately visit their website and enter his bank account information so that the proceeds from his closing could be wired to his account. He missed the cute beaver logo that usually showed up at the bottom of their emails but he needed to comply right away so his closing wouldn’t be delayed. A few days later, Drew found out that he had been the victim of a spear-fishing attack and now all of his funds had been taken from his account. Which of the following should have been a cyber fraud red flag?

A. Lack of a logo in the email

B. Spelling and grammar errors

C. The urgency of the request for his bank account information

D. A link in the email

E. All of the above

What to Look For

As a settlement agent, you have an ethical responsibility to protect not only your customers’ personal information, but all the funds entrusted to you as part of the transaction.

The following are some of the statutes and rules which govern your responsibilities to your customers.

Section 626.8473, F.S - Escrow; Trust Fund

Rule 69O-186.009 F.A.C.

Florida Land Title Association Code of Ethics

Florida Bar Rule 5-1.2

Gramm-Leach-Bliley Act

FTC Safeguards Rule

Phishing/Spoofing Red Flags

Be suspicious of any unsolicited email requesting personal information.

Avoid filling out forms in email messages that ask for personal information.

Always compare the link in the email to the link that you are actually directed to.

Log on to the official website, instead of "linking" to it from an unsolicited email.

Contact the actual business that supposedly sent the email to verify if the email is genuine

Look out for incorrect spelling and/ or grammar: Although the level of sophistication employed by hackers is constantly improving, many phishing e-mails still contain misspellings and poor grammar. Some of them have been poorly translated from other languages. In addition, pay attention to the time the e-mail was sent and the date format – if it is DD/MM/YY, it may not be coming from the US.

Email format/absence of logos: Think about your own work e-mail. Your signature block most likely contains your company logo as well as text. The lack of a logo is a cause for suspicion, as is an e-mail which is all plain text and looks different in any way from what you are used to seeing from a frequent sender.

Always review e-mail headers, domain names in the “from” and “reply to” fields of the e-mail. It’s very common to find a one letter/numeral change to the e-mail address to mimic the original.


Be suspicious of links in e-mails. If possible, hover over a link before clicking on it to check the link, or open a new browser and type the URL directly in to the address bar.

Urgent requests of personal information. A commonly used tactic is to trick you in to providing personal information by claiming you need to verify information you have previously provided within a specified period of time to avoid some dire consequence, hoping you will panic and proceed without thinking too much about it.

Suspicious attachments. Many systems filter out high risk attachments but that doesn’t mean that anything that makes it through is safe. Always be suspicious of files which have an attachment which come from an unknown sender or an unexpected attachment from a known sender.

Title Agent Identity Theft

In January of 2017, FNTG Florida Underwriting released Confidential Alert 2017-001, which detailed a new type of identity theft, the identity theft of a title insurance agent. In this scheme, the fraudster files an amendment to the title agency’s corporate/business registration records with the Florida Secretary of State.


Cyber Incident Preparedness Checklist

Below is a checklist you can use before, during, and after a cyber intrusion or attack. This checklist takes information from both the U.S. Department of Justice’s Best Practices for Victim Response and Reporting of Cyber Incidents and the FBI’s Internet Crime Complaint Center’s Business Email Compromise Alert I-082715a-PSA.

Before a cyber intrusion or attack

Identify mission critical data and assets (your “crown jewels”) and institute tiered security measures to appropriately protect those assets.

Review and adopt risk management practices found in guidance such as the National Institute of Standards and Technology Cybersecurity Framework Have an actionable plan in place before an intrusion occurs Test Plan with (scheduled) exercises Keep plan up-to-date to reflect changes in personnel and structure Have appropriate technology and services in place before an intrusion occurs Have appropriate authorization in place to permit network monitoring Ensure your legal counsel is familiar with technology and cyber incident management to reduce response time during an incident Ensure organization policies align with Incident Response (IR) plan Engage with law enforcement before an incident Establish relationships with cyber information-sharing organizations

After a cyber intrusion or attack

1. Make an initial assessment of the scope and nature of the incident, particularly whether it is a malicious act or a technological glitch

2. Implement measures to minimize continuing damage 3. Record and collect information

a. Image affected computer(s) b. Keep logs, notes, records, data c. Record any continuing activity/attacks

4. Make appropriate notifications to: a. Personnel within a company or the organization b. Federal and State law enforcement c. Regulators – Local and Homeland Security d. Other Potential victims

5. Review response and remain vigilant a. Continue monitoring the network for any anomalous activity to make sure the Intruder has

been expelled and you have regained control of your network b. Conduct a post-incident review to identify deficiencies in planning and execution of your

incident response plan

What not to do following a cyber intrusion or attack

Do not use the compromised system to communicate Do not try to ‘fix’ this yourself Do not hack into or damage another network Think that the problem is solved after you correct Start using the repaired system or computer Think that this will never happen again Believe that your other systems and computers are ‘safe’