1972, February, Pg. 17. Bar-Related Title Insurance for Colorado.

• Author: by John S. Kellogg

1 Colo.Law. 17

Colorado Lawyer

1972.

1972, February, Pg. 17.

Bar-Related Title Insurance for Colorado

171972, February, Pg. 17Bar-Related Title Insurance for Coloradoby John S. KelloggJohn S. Kellogg, Denver, is President of Attorneys' Title Guaranty Fund, Inc. He is presently chairman of two ABA committees: the Special Committee on Lawyers Title Guaranty Funds and the Committee on Liason with Real Estate Trade Association and Bar Activities. In addition he is co-chairman of the CBA Committee on Review of Colorado Statutes Relating to Real Estate.

It's hardly news to lawyers that various nonlawyers provide legal services as "incidental" to their primary functions or products.(fn1) This use of legal services as "fringe benefits" or "loss leaders" to promote some other activity is harmful in at least three ways:

- It deprives the public of sound legal advice, often when most needed.- It deprives lawyers of a substantial part of their practice.- It removes legal services from the personal and highly professional levels that give them true worth and converts them into marketplace commodities.Nonlawyers frequently provide legal services in connection with real estate transactions, and the bar responds in two ways. One way is through various unauthorized practice suits, but tested by a cost-effectiveness formula these are far from satisfactory.

A positive approach is improvement of the ability of lawyers to serve their clients. An element of every real estate transfer is the assurance to the buyer (or lender) that the title to the property is satisfactory. Traditionally in Colorado, this assurance was given by lawyers who examined the records, or an abstract of them, and then wrote their findings in a title opinion.

Following World War II, the use of abstracts and lawyers' title opinions rapidly declined. As large residential tracts were developed, the developers found that they could provide their vendees with title insurance at a cost far below the cost of abstracts. Furthermore, as real estate mortgage money began to flow from large insurance companies and other institutional investors, the lenders demanded the convenience and protection of title insurance.

An analysis of the functions and obligations of lawyers who render title opinions and the functions and obligations of title insurance companies shows how, under suitable conditions, the two concepts can be united.

18When a lawyer renders a title opinion...