The Florida Bar

Ethics Opinion

Opinion 75-6

June 25, 1975
Advisory ethics opinions are not binding.
An attorney who represents a condominium developer and is also an agent for the title insurer
may properly retain as part of his or her fee for representing the developer a portion of the
premium that the purchaser pays for the title insurance, provided full disclosure is made to the

65-58, 69-39, 73-1, 74-50
Fla. Admin. Code §4-21.03

Vice Chairman Sullivan stated the opinion of the committee:
A condominium developer uses a form purchase agreement which requires
the developer to deliver to the purchaser at closing an owner’s title insurance
binder from Lawyers’ Title Guaranty Fund or such other reputable title insurer as
the developer may determine and the purchaser to pay for it in accordance with
the standard card rate generally in existence and accepted by title insurers in the
county where the condominium is located.
We are asked whether the lawyers for the condominium developer may with
propriety retain as part or all of their legal fee for closing a sales transaction for
the developer part of the premium the purchaser pays for the title insurance
pursuant to the provision in the purchase agreement.
Ordinarily, the attorney for the purchaser obtains the title insurance, and the purchaser
pays for it. The minimum risk rate that the Insurance Commissioner requires a title insurer to
charge (Section 4-21.03 of the Administrative Code of Florida) exceeds the amount that the
agent must remit to the insurer. We note that attorneys who are members of Lawyers’ Title
Guaranty Fund and act as agents for the Fund commonly retain as part of the fee they charge
their clients for handling a particular transaction the difference between the premium they are
required to charge and the amount remitted to the Fund.
This inquiry assumes that the developer’s attorney will obtain the title insurance and the
developer will pass the cost on to the purchaser pursuant to the purchase agreement.
We view the provision in the purchase agreement requiring the purchaser to pay for
owner’s title insurance obtained by the developer as an item open for negotiation at the time the
developer and purchaser discuss terms and, if not prohibited by statute, find no impropriety in
such a provision. The purchaser does not have to agree to it initially.
In Opinions 65-58 and 69-39, we found no impropriety in arrangements that shift to a
purchaser or borrower part or all of a seller’s or lender’s attorney’s fees and other costs but in

Opinion 69-39 said that the mortgage company’s attorney should make it clear to the seller and
the purchaser that he was in fact attorney for the mortgage company.
The present inquiry narrows to the question whether disclosure of such an arrangement
regarding title insurance is required. We believe that it is even though the purchaser pays the
same amount for the title insurance regardless of where the premium goes. Thus, we are of the
opinion that the attorney for such a condominium developer may properly retain as part or all of
his fee for representing the developer the part of the premium from Lawyers’ Title Guaranty
Fund the lawyer retains as agent provided that disclosure of that fact is made to the purchaser.
We believe that the disclosure should be made at a time and in a manner that gives the purchaser
a choice and not at the closing after the purchase agreement has been signed, presumably a
deposit made and title insurance already obtained. See Opinions 74-50 and 73-1.