More on “Split Settlements” in Virginia @VAStateCorpComm @VAHouse @VASenate @GlennYoungkin @WinsomeSears @OpenVaLaw #VABOI #BOI #insurance #Virginia #realestate #vasenate

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As I previously discussed, the Virginia Bureau of Insurance (“BOI”) published a letter in February, 2022, stating that they interpreted Virginia Code § 55.1-900, et seq. and § 55.1-1000, et seq. to prohibit the long-standing practice of “split settlements.” The letter (of course) didn’t change the law, regulations, rules of legal ethics, or even the standard contracts used throughout Virginia. It’s purpose was to tell our industry that our practices must change because those long-standing practices are illegal. Because this would cost many attorneys money, they’ve resisted change, but that places law-abiding lay title companies and attorneys in a quandary. In order to comply with the BOI’s instructions, they must require change, but the arrogant, unethical attorneys — in particular, the ones from Central Virginia whose practices were the primary target of letter — refuse to do so.

The Simple Calculus

Consider the following authorities that govern these matters expressed as simply and directly as possible.

“[I]t is ultimately the settlement agent, as identified by the buyer, who must perform all of the settlement services prescribed by the Code.”

BOI letter, Item II.

“’Escrow, closing, or settlement services’ means the administrative and clerical services required to carry out the terms of contracts affecting real estate. These services include . . . receiving and issuing receipts for money received from the parties, ordering . . . payoffs, ordering . . . inspections, preparing settlement statements or closing disclosures, determining that all closing documents conform to the parties’ contract requirements, setting the closing appointment, following up with the parties to ensure that the transaction progresses to closing, ascertaining that the lenders’ instructions have been satisfied, conducting a closing conference at which the documents are executed, receiving and disbursing funds, completing form documents and instruments selected by and in accordance with instructions of the parties to the transaction, handling or arranging for the recording of documents, sending recorded documents to the lender, sending the recorded deed and the title policy to the buyer, and reporting federal income tax information for the real estate sale to the Internal Revenue Service.”

VA Code § 55.1-1000, (edited to remove those services that are not at least in part performed for the benefit of the seller).

“[T]hat portion of the Settlement Agent’s fee billed to Seller . . . and any other proper charge assessed to Seller will be paid by Seller.”

Northern Virginia Association of Realtors Regional Sales Contract, paragraph 22.

So, let’s sum up what these three quotes provide. To start, the Settlement Agent has complete control over all closing services, which means they perform and charge for them, or allow them to be performed by another qualified entity (title company or attorney) as directed by the Settlement Agent. Even if directing another to perform, the Settlement Agent must still verify that the other qualified entity did a competent job, because the Settlement Agent will be held responsible for the errors of that other entity. While it’s well-understood that any entity providing professional services is entitled to charge for those services, the standard contracts used throughout Virginia nevertheless expressly provide that the seller should pay seller fees to the Settlement Agent (albeit some more vaguely than others). How could an attorney well-versed in the law make a good faith argument against the authority of the Settlement Agent?

They can’t.

Any such argument must be in bad faith. The BOI’s interpretation is crystal clear and in a completely accurate interpretation of the law, and the contracts reflect that. There’s simply no support for the contrary argument, and citizens, but especially attorneys, should know that they may not pick and choose which laws they want to follow. A couple weeks ago, I spoke to the offices of some legislators, after which I emailed them a more detailed argument than you’ll read here. Attorneys are intimidating Settlement Agents (i.e., lay title companies and other attorneys), threatening complaints if the Settlement Agent includes fees for their own services on the final settlement sheet. They advance twelve strawman arguments devoid of any logic to justify their behavior, and employ several underhanded tactics, exposing the attorneys’ true motives. These attorneys don’t care about the law, regulations, rules of legal ethics, or even their own clients’ wishes, but instead care only about their wallets and egos.

A Dangerous Culture

These attorneys are leading the charge towards establishing a culture of noncompliance with the law. My employer (a title company) lost at least two transactions because the seller’s real estate agent knew we would be charging the seller a fee. This demonstrates that their attempt to control our fees cannot be separated from unlawfully influencing the choice of settlement agent.

A purchaser or borrower in a transaction related to real estate in the Commonwealth shall have the right to select the settlement agent to provide escrow, closing, or settlement services in connection with the transaction. The seller in such a transaction may not require the use of a particular settlement agent as a condition of the sale of the property.

§ 55.1-1006 (emphasis added)

Of course, this is a problem that predates the BOI’s letter. I received an email only two hours before publishing this post in which a real estate agent threatened not to have her clients sign a contract if we weren’t willing to hold an escrow of their FIRPTA funds. To repeat, a seller may not refuse to sell their property based on who the buyer chooses as the settlement agent. These real estate agents are sometimes ignorant as to the gravity of their words — they aren’t attorneys — and that makes them quite impressionable to videos like this one in which a title insurance agency provides instruction on how to vet the settlement agent in violation of § 55.1-1006.

To avoid the argument, some attorneys are withholding information in order to prevent the Settlement Agent from performing the work. Consider the following:

“Seller will sign such . . . documents as may be required by the . . . Settlement Agent, and . . . authorizes Settlement Agent to obtain pay-off or assumption information from any existing lenders.”

Northern Virginia Association of Realtors Regional Sales Contract, paragraph 20.

How can an attorney, in good faith, argue that the Settlement Agent has no authority to order the payoffs? You know the answer.

The result is a culture of attorneys, title companies, and real estate agents all continuing to act without respect for the law or their clients own directions, and relying on “everybody’s doing it” to justify their illegal activity.

Dealing with the Legislature

I’ve proposed several edits to the existing laws, most of which shouldn’t be necessary but will be helpful in making it all the more difficult for these attorneys to avoid sanctions if they continue to disregard legislative intent. However, my claims also establish one important point addressed by my most important proposed edits: The statute demands that the seller not in any way influence the buyer’s choice of the Settlement Agent, but objecting (without authority) to the Settlement Agent’s fees necessarily exerts such forbidden influence on that choice. The two can’t be separated. The relevant section forbidding such influence is § 55.1-1006, which was recently amended. Here is the section with my proposed changes appearing as underlined text:

Choice of settlement agent. A purchaser or borrower in a transaction related to real estate in the Commonwealth shall have the right to select the settlement agent to provide and charge fees for escrow, closing, or settlement services in connection with the transaction. The settlement agent may, at its sole discretion, contract with other entities permitted by law to perform escrow, closing, or settlement services at the direction of the settlement agent. The seller in such a transaction may not require the use of a particular settlement agent as a condition of the sale of the property, nor may the seller by contract avoid payment to the settlement agent for such services performed by the settlement agent on behalf of the seller. Nothing in this chapter shall prohibit a seller from retaining an attorney licensed pursuant to Chapter 39 (§ 54.1-3900 et seq.) of Title 54.1 to represent his interests and provide legal advice pertaining to escrow, closing, or settlement services. Such representation may include deed preparation, fee negotiation with entities other than the settlement agent, and review of applicable documents and advising the seller on any legal matters related to the settlement or closing process. Fees charged for such legal services would be in addition to fees charged by the settlement agent and must be paid by the seller.

§ 55.1-1006

An analogous change would need to be made to § 55.1-1007 in order to completely close this loophole. I’ve also made additional proposals expressly including attorneys as subject to sanctions for violations of the code and expressly acknowledging that the Settlement Agent chooses whether or not to delegate performance of closing services to other entities. In truth none of these should be necessary. Their purpose is to prevent attorneys from manipulating the statutory text so as to deny the necessary effects of their disruptive behavior. Attorneys shouldn’t be doing that to save a revenue stream to which they were never entitled in the first place.

All that said, it’s possible that the legislature wants to change the law and allow for multiple settlement agents. Maybe they want to do away with lay title companies altogether. All of that is their prerogative. However, if they still intend for their to be only one Settlement Agent, then they need to amend the relevant laws as I’ve requested. Either way, it should trouble everyone in the Commonwealth — politicians, regulators, and consumers — that attorneys are showing such brazen disrespect for the rule of law. Even if they change the law, where’s the guarantee that these attorneys will follow it if they don’t like it even as rewritten? There needs to be greater deterrence.

If you want this change to occur, please retweet my tweet. Your retweets will each tag the relevant authorities that need to give me an audience.

There are bigger fish to fry, but this is still an important issue.

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The Apple of Discord: The BOI’s Letter of February 4, 2022 @VAStateCorpComm #VABOI #BOI #insurance #Virginia #realestate

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The Virginia Bureau of Insurance (“BOI”) recently published a letter that’s turned the real estate industry upside down. In short, they suddenly published an opinion stating that they interpreted Virginia Code § 55.1-900, et seq. as prohibiting the long-standing practice of “split settlements.” Well, sort of (q.v.). There’s been a lot of commentary on the subject that I won’t rehash here. Instead, I’ll do three things: 1) point you to the letter; 2) point you to the FAQ that followed; and 3) tell you that I have a firm opinion on how the letter, FAQ, and Virginia law should be interpreted.

That said, there are many in the industry that disagree with my interpretations. This is problematic. The real estate industry is filled with attorneys whose job description can be described as little more than, “Find ambiguities and exploit them to benefit your client.” That’s what we do, and we’re usually better at it than the average person. While I believe that many people are intentionally misconstruing the letter and FAQ simply to protect their seller-side-only settlement revenue streams (e.g., those that, as recently as 2 minutes before my scheduling of this post, knowingly misapply Legal Ethics Opinion 1346, et al. to settlement companies), some of the disagreement is honest and reasonable. Because we’re all bound by the requirements of our insurance licenses and, in some cases, law licenses, to get this right, that’s going to result in angry, threatening phone calls and emails, then ethical complaints to the BOI and Virginia State Bar (“VSB”), and finally actual lawsuits. I’ve experienced the first part of that already and have been threatened with the second. I’ve also been threatened by attorneys stating that they’ll advise their clients not to show up for closing. This means that consumers will also be made to suffer, and they may soon also be threatening lawsuits. Clearly, time is of the essence, and the BOI knows that.

I Can Also Write Letters

On March 7, 2022, I sent an email to the email address to which the letter directed us for questions and comments. For the record, it’s Please make a note of that. In the fashion typical of an attorney, my email was well-organized, provided context for my concerns, and then asked five pointed questions. The response I received from Chuck Myers (Supervisor of the RESA Investigations Section for the Virginia Bureau of Insurance) merely regurgitated the vague language of the BOI letter and FAQ and flat out ignored my questions. I wrote a return message, some of which I reproduce here.

Is there any way I can get direct answers to the questions I asked? They represent common sources of tension between title companies springing directly from ambiguities present in the BOI letter of 2/4/2022. [Settlement Company] has gone so far to publish a letter instructing TSAs what they’re permitted to charge even in situations where MBH isn’t the TSA and therefore has no defined place in the transaction. For a settlement company that is NOT the TSA to be attempting to dictate terms like that seems ridiculous . . . . The industry needs clarification as to the consequences of the BOI’s interpretation of RESA. Here are the questions once again.

The questions were as follows:

  1. In of the Virginia Code § 55.1-900, et seq., does the Seller (or any agent of the Seller) have the right to dictate the amount of the processing fee charged by the Settlement Agent to the Seller?
  2. Is a $425 processing fee charged by the Settlement Agent to the Seller per se unreasonable even if the Seller’s side of the settlement is outsourced to another settlement company chosen by the Seller?
  3. Does the answer to the second question depend on the specific facts of each case, and therefore require the Settlement Agent to vary its fee depending on exactly which services are performed on behalf of the Seller?
  4. If the answer to the third question is that the Settlement Agent must tailor its fees to the specific facts of each case, is a $425 processing fee is per se unreasonable if it includes performance of the Seller’s side of the settlement?
  5. In light of Virginia Code § 55.1-900(9), is the Settlement Agent permitted to compel the Seller to allow the Settlement Agent to perform the Seller’s side of the settlement?

For the record, NVAR’s Regional Sales Contract, which governs the majority of residential closings I see, also leads to my interpretation, but I can’t ask the BOI to interpret a contract. See paragraphs 4 (“Settlement”) and either 22 or 23 (“Fees”).

I have yet to receive a response — not even one saying that he can’t answer my questions — and considering how quickly I received his first response, I think it’s safe to say that I won’t be receiving one, the nuisance that I am.

Nobody Wants a War

Here’s the thing: I’m not concerned whether the BOI makes a statement agreeing or disagreeing with me. What concerns me is that they’re refusing to make any subsequent statements at all even in response to specific issues carrying widespread disagreement in the industry. If licensed professionals have an honest belief that the “other side” is violating the law, the rules of ethics, or the terms of the clients’ contract, those professionals are ethically and legally bound to issue the aforementioned threats. We’re just doing our jobs. This isn’t our fault.

The BOI has acted as Eris, the Greek goddess of discord. Eris threw an apple between the divine guests at a wedding. It was inscribed with the words “for the most beautiful,” or “to the fairest,” with the resulting squabble among Aphrodite, Athena, and Hera eventually ballooning into the Trojan War. Much like the uncaring gods, the BOI has now stepped back as if to say, “Not our problem.” If they’re simply dragging their feet, that’s no better. They know what they’ve caused and have had plenty of time to form their opinion. Expressing that opinion in an email or letter, or simply updating their FAQ, is a relatively quick part of that process. Failure to do so is irresponsible, unprofessional, and a violation of whatever oath, formal or otherwise, the higher ups have taken as public servants.

That horse is filled with attorneys. It’s frightening.

A Solution

If my underlying premise about industry tension is correct — and I don’t see how it couldn’t be — then my questions are your questions as well. So, flood the email address with those same questions so that they’ll be defined as “frequently asked.” If your interpretation of the BOI’s letter and FAQ differs from mine, and you feel you need to phrase these questions to cater to your interpretation, even better. Show Mr. Myers and the BOI that there is genuine disagreement and tension in the industry. We’re all trying to minimize our risk, and we need more clarity to do so.

Get your act together, BOI, and return stability to our industry. My phone won’t stop ringing.

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Cleveland Guardians Facing Lawsuit over Name Change @Indians #Cleveland #Guardians #MLB #trademark

Blog posts cannot substitute for legal advice. If the topics discussed in this post are relevant to a real case you have, please consult an attorney.

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A roller derby team has sued the team formerly known as the Cleveland Indians.

You may have heard that the Cleveland Indians are no more. The Major League Baseball team’s name has been changed to the Cleveland Guardians, though not on Twitter (what choice do they have?). Unfortunately, there already is a Cleveland Guardians team in Cleveland. They’re a roller derby team (yeah, they own the website address), and they claim to have a trademark in the name, prompting them to sue the baseball team. The roller derby team is also claiming that the baseball team attempted to buy out their rights to the name with an insulting offer. If true, this means that the baseball team was aware of the roller derby team’s superior rights to the trademark. That’s not a good look, but you can always put a spin on that sort of thing.

I’m using legalese to avoid making affirmative claims without the facts, but for what it’s worth, the roller derby team applied for federal a trademark claiming first use in commerce as far back as 2014. Though they applied in July (four days after the baseball team’s two trademark applications), they registered their business in 2017, which is strong evidence that at least have local rights within the state of Ohio, or at least the Cleveland metropolitan area. As of this writing, the business is still active.

They may have “common law trademark” rights outside Ohio (rights acquired not through registration, but through mere use since their founding in 2013) based on playing teams throughout the Midwest, but that would have to be proven. Either way, if they win in Ohio, the baseball team would have to operate in Ohio with a different name than elsewhere throughout the country. In other words, the baseball team needs those local rights.

Fortunately for the baseball team, money prevails, and they have plenty. Fortunately for the roller derby team, it seems like they’re headed for a not-so-insulting payout. It’s possible everyone wins here, though in an unseemly way.

Welcome to litigation!

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The Washington Football Team’s Trademark @KevinSheehanDC #WFT #NFL #trademark

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This morning, I sent a tweet to our best sports talk guy in the DC area, Kevin Sheehan. He was confused as to why the Washington Football Team hadn’t yet secured a new team name. His conclusion is likely sound: Daniel Snyder’s arrogance put the team in a position where they were running around like chickens with their heads cut off. That’s not exactly how Kevin said it, but that’s how I interpreted it, and in any event, that’s how I see it.

I tweeted to him (above) from my sports-based Twitter account about one of his misunderstandings, referencing the Anticybersquatting Consumer Protection Act, but his response on air also wasn’t quite right (close though). I thought I’d provide some more context, though to keep this short, I’m leaving out a ton of material.

Intent to Use or Actual Use

Among many other requirements, to receive a trademark, you must swear under oath that you are using the mark in commerce or intend to do so soon. Moreover, you must specify the industry of use. In other words, my trademark application for EasySoft software is separate from my application for EasySoft tissue paper because they’re different industries (“classes” in trademark lingo). This will be important shortly.

Toeppen and the ACPA

Before businesses really understood the internet, Dennis Toeppen registered a lot of domain names through Network Solutions based on those businesses’ trademarks (e.g.,,, He registered in 1995. Eventually, Panavision tried to do the same and learned of Toeppen’s registration. They demanded he hand over the domain, which Toeppen said he’d do for $13,000. (If my memory serves me, he originally requested less, but raised his demand twice each time Panavision caved in. He wanted them to accept the demand at the moment he made it.) When they refused to pay, Toeppen responded by registering, which is another of Panavision’s trademarks.

Funny story: At the time, if you went to the website, you’d see a live feed of an ordinary intersection on the streets of Pana, Illinois.

Panavision sued for trademark dilution and ultimately won in the appellate court in 1998. Following the Toeppen case, Congress passed a federal law, Anticybersquatting Consumer Protection Act, providing a civil “cause of action” for such cases (1999).


All of this should leave you scratching your heads, thinking, “How have these cybersquatters secured trademarks for Freedom Fighters, Redtails, War Hogs, Warriors, etc. and not have had them cancelled?” Simply put, no one’s tried to cancel them. The US Patent and Trademark Office doesn’t have “trademark police” collecting evidence of fraudulent applications.

Note: “Fraud before the PTO” is a term of art referring to filing an application knowing that its contents are false. That application is sworn under oath.

At the time of registration, the trademark examiner had no reason to believe that the application was fraudulent, so the only way to invalidate the trademark is for someone to come along an file for a cancellation of that mark (an “opposition”). In short, this is nothing more than a headache for the Washington Football Team. They should have little to no problem invalidating those marks considering how deep their pockets are. For most of us, the time and expense is a genuine hurdle, which is why people still get away with it today.

Speaking of which . . . .

Washington Football Team

The team’s application for “Washington Football Team” was denied. I may have misheard Kevin, but it appeared that he thought this was the same issue. It wasn’t. There was no existing registration for that mark, so cybersquatting is irrelevant. It was denied because it was “too generic” for trademark eligibility, which means no one may register that mark. I don’t consider this a controversial position for the USPTO to take, and the only mistake the team made was wasting their time and money on the application. However, again, they have deep pockets, so why not?

What does “too generic” mean? For an explanation, please visit my post on the distinctiveness of trademarks.

I hope that helps.

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Prince William County Courthouse Shutdown #Virginia #inauguration

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The Chief Justice of the Prince William County (Virginia) Court issued an order yesterday (1/14/2021). It reads in pertinent part:

Upon credible evidence of a threat to the safety and security of the Courthouse and those within the Courthouse, the Chief Judge declares a judicial emergency . . . thereby closing the Prince William County Courthouse on Tuesday, January 19, 2021, and Wednesday, January 20, 2021.”

The order itself can be found here but will eventually be taken down:

We knew they’d be closed on Monday for of Martin Luther King’s birthday, but they won’t be reopening until Thursday due to security concerns related to the inauguration on Wednesday. I expect other courts to follow in their footsteps if they haven’t already. I’ll keep an eye out for those orders.

EDIT: The Fairfax County Courthouse is also closed on Monday and Wednesday, but as of the moment, it’s open on Tuesday. The same is true for the Alexandria City Courthouse.

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Driving on an Expired Driver’s License in #Virginia #crime #traffic #DL

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I’ve written twice before about automatic extensions for driver’s licenses due to COVID-19. As of this writing, there have been no updates, so if your drivers license has expired on its face, it’s expired by now. Even if there’s a new round of extensions, it’s important to note that, to date, no one’s license was extended more than 180 days (usually 90 days), so any such extension is likely to apply to licenses that expired in June of 2020, and most likely wouldn’t apply to licenses that expired in September.

Lately, I’ve been getting questions about this from my processors about whether we can use expired licenses for notarizations, so of course I’m saying no. But one of our processors asked the question, “How are these people driving without valid driver’s licenses?”


This is no small matter. Under § 46.2-300 of the Code of Virginia, driving on an expired license is a crime. Specifically, a first offense is a class 2 misdemeanor that can result in “confinement in jail for not more than six months and a fine of not more than $1,000, either or both.” Any subsequent offense is a class 1 misdemeanor that can result in “confinement in jail for not more than twelve months and a fine of not more than $2,500, either or both.” See § 18.2-11. No one will get the maximum penalty the first couple of times, but why risk any jail time? In the pandemic era, if you’re having trouble making ends meet, why risk any fines?

Many people are capable of renewing their driver’s licenses online or through the mail. For those that can’t, please make an appointment with the Department of Motor Vehicles as soon as possible to have your expiring license renewed. The consequences of doing so can be devastating.

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Update: #Notarizations in #Virginia in Light of #COVID19

I previously wrote about notarizations with expired Virginia IDs. With October 31 having passed, Virginia has updated their policy on expired drivers’ licenses and other driving-related documents. You can find that policy by clicking here (opens in a new tab). Here’s a quick summary.

Non-commercial driver’s licenses, learner’s permits, special identification cards, and vehicle credentials due to expire between March 15, 2020, and July 31, 2020, expired on October 31, 2020. That hasn’t changed. Those that display an expiration date between August 1, 2020, and October 31, 2020, are extended for 60 days. Again, this means that they are not expired despite having an expiration date that has passed on the face of the document, and this also means they’re still valid IDs for the purposes of notarizations.

Considering that the DMV site went out of its way to say that this 60-day extension did not apply to the prior batch of licenses (i.e., expiring between March 15, 2020, and July 31, 2020), it’s safe to assume that this new batch will all expire no later than December 30, 2020. Note, however, that the 60-day period must be calculated from the date on the license itself. So, as of the date of this post, license with an expiration dates prior to September 20, 2020, have expired; a license with an expiration date of September 21, 2020, expires tonight at midnight; a license with an expiration date of September 22, 2020, expires tomorrow night at midnight; and so on.

Here’s the schedule as of today:

Please revisit that prior post to see how the laws of other states may come into play.

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Notarizations in Virginia in Light of the Pandemic #RealEstate #law #closing #notary

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Except in specific cases, you may not notarize a signature using an expired form of identification. The pandemic hasn’t changed that. However, according to the Virginia DMV, drivers’ licenses set to expire on or before July 31, 2020, did not expire. Their validity was extended for up to an additional 90 days, but in no event not beyond October 31, 2020. Ergo, the licenses have not actually expired despite the date that appears on them, so you may still notarize signatures using such Virginia drivers’ licenses in any state.

It’s certainly possible that another state may pass a law or issue an executive order that forbids using a driver’s license with a past expiration date on it regardless of their continued validity, but by default this should not be the case. The laws and orders are generally phrased to the effect of “the license must not be expired,” and the licenses described here are not expired. Nevertheless, check with your state to make sure no contradictory order has issued.

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Judgment Liens #RealEstate #law #closing

When a judgment is rendered against a defendant, the judgment often “attaches” to the defendant’s real property within the county in which the judgment issued. Moreover, judgments can be recorded in the courthouses of other jurisdictions, which means judgments can wreak havoc on that defendant anywhere the defendant owns property. The result is that no potential buyer will agree to purchase the real property, and no lender will refinance it. However, while these liens may seem to last forever, they don’t.

How Long Do They Last?

  • Virginia: Judgment liens expire after 20 years, which can be extended in 20-year periods. Virginia Code, § 8.01-251.
  • Maryland: Judgment liens expire after 12 years, which can be extended in 12-year periods. Courts and Judicial Proceedings, § 5-102.
  • Washington, DC: Judgment liens in the US District Court for the District of Columbia or the Superior Court of the District of Columbia expire after 12 years, which can be extended in 12-year periods. DC Code, § 15-101.

If enforcement of a judgment lien is stayed by agreement, court order, or operation of law (e.g., during an appeal), the expiration date will be pushed back to accommodate that stay. That is, the judgment creditor will get an extension on that lien for exactly the amount of time of the stay.


Sometimes judgments will not even attach in the first place. For example, if the property is located in an jurisdiction that allows ownership as “tenants by the entirety,” and the owners of the property are married and  took title that way, then a judgment against only one of them won’t attach to the property. The judgment must be against both of them. In Maryland, this protection can apply even to parties that aren’t married but took title as “joint tenants.”

Another reason a judgment wouldn’t attach is because it isn’t actually a judgment against the owner. Judgments sometimes provide the last 4 digits of the defendant’s Social Security number. This can help you rule out the judgment as not attaching to the owner’s property. However, even this doesn’t work in certain extreme cases. If an owner’s name is, for example, John Smith, there are going to be a plethora of judgments that potentially attach to the property. As of November 23, 2010, there were 44,935 John Smiths in the United States, and there are only 10,000 combinations for the last 4 digits of a Social Security number. In an extreme case like that (e.g., James Smith?), it’s possible that the judgment debtor’s name and last 4 digits are the same as that of the owner. Fortunately, this is very unlikely to occur, but it’s something for an owner to consider if their name is very common.

This post just scratches the surface. There are a few more twists and turns. If you’ve had a judgment rendered against you, ask an attorney as to how it effects your specific interests.

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Penalties for Leaving Lender Liens Unreleased #RealEstate #law #closing

This post is an update to, and expansion on, a prior post.

When a deed of trust, mortgage, or other lien is recorded, it attaches to real estate. When the debt associated with the lien is paid in full, the lender has a legal obligation to have it released. Nevertheless, some lenders don’t meet this requirement, and people rarely punish them for it, meaning they will continue to allow those mistakes to happen. The law provides recourse.


The lender has an obligation to deliver a certificate of satisfaction to release that lien to the title company, or to record it themselves, within 90 days of the loan being paid in full. Virginia Code § 55.1-339(B). If they don’t, they’re liable for $500, and could be liable for attorneys’ fees and costs spent to collect that $500. From the statute,

Following the 90-day period, if the amount forfeited is not paid within 10 business days after written demand for payment is sent to the lien creditor by certified mail at the address for notification set forth in the payoff statement, the lien creditor shall pay any court costs and reasonable attorney fees incurred by the obligor in collecting the forfeiture.


A title company must give the mortgagee 60 days to provide them a release to record, and if no such release to a title company, the title company must send a notice to the mortgagee that it has 30 days to provide such a release, or the title company will record the one that’s included with the notice. Real Property, § 3-105. If the lender fails to record the certificate of satisfaction, the title company, after demanding the recordation, may sue in the Circuit Court for the delivery of the release and all costs and expenses of the lawsuit. Real Property, § 7-106(e).

Washington, DC

The mortgagee must provide or record a certificate of satisfaction within 30 days of payment. If they fail to do so, and then receive a demand from the borrower to provide or record a certificate of satisfaction, they have an additional 30 days to comply. Failure to comply entitles the borrower to $50 of damages per day plus reasonable attorney’s fees and costs necessary to enforce violations related to the dispute. DC Code, § 42-818.02(e).

What Can You Do?

Short answer: Call your state representative, or be picky when choosing your title company.

All these statutes give the lender an escape route. If the lender provides the certificate of satisfaction to the title company, then they’ve met their burden under the law. So, the lender need only claim that they sent the release to the title company, and if the title company doesn’t want to risk losing the lender as a client, then the title company takes the fall, and no one is legally liable for it. There are at least two means to fix this.

First, you can call your state (or city) representative and request a change to the law that places the burden on the lender even where the title company drops the ball. On that, I wish you luck, but don’t get your hopes up too high.

Second, many title companies now use the ReQuire service that tracks the recordation of a certificate of satisfaction after closing. As that service becomes more popular, unreleased deeds of trust will inevitably become less frequent. That is, after all, the goal. This isn’t about getting a $500 payday after weeks of litigation. It’s about preventing the problem in the first place. This is by far the method most likely to be effective, but the burden is on the title insurance industry to make this change. As a consumer, you can always ask whether a title company uses a service such as ReQuire and refuse to work with them if they don’t. Remember, the choice of title company is always yours. Neither a lender nor a Realtor can require you use their preferred title company.

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