CRESPA

Overview

The Consumer Real Estate Settlement Protection Act (CRESPA or the Act) authorizes licensed Virginia attorneys, title insurance companies and agents, real estate brokers and financial institutions (or a subsidiary or affiliate thereof), to serve as Settlement Agents and provide "escrow, closing or settlement services" if they register with the Virginia State Bar and meet other conditions of their regulatory agencies. CRESPA went into effect July 1, 1997 and can be found at Virginia Code Sections 6.1-2.19 through 6.1-2.29. In summary, CRESPA:

1. Allows certain non-lawyers who are licensed title agents or real estate brokers, as well as title insurance companies and financial institutions, to conduct residential real estate closings for members of the public;
2. Requires all real estate settlement agents conducting residential closings, lawyers and non-lawyers alike, to register with the Virginia State Bar;
3. Establishes certain public protection measures, which must be put into place by non-institutional settlement agents to the satisfaction of their regulatory agencies;
4. Leaves in place the bar's unauthorized practice of law enforcement authority and makes it clear that legal advice in connection with a real estate settlement can only be provided by a licensed Virginia attorney;
5. Requires the Virginia State Bar, in consultation with the State Corporation Commission and the Virginia Real Estate Board, to develop unauthorized practice of law guidelines applicable to the real estate settlement field for the purpose of assisting real estate settlement agents in avoiding and preventing the unauthorized practice of law; and
6. Provides for significant penalties for violations of the act.

The Virginia State Bar has issued regulations governing the registration procedures for all real estate settlement agents, as well as the certification that will be required of all attorney real estate settlement agents regarding the public protection measures required of them.

The bar's UPL Committee, in consultation with representatives of the State Corporation Commission and the Virginia Real Estate Board, has also issued UPL guidelines as required by the legislation. The bar's CRESPA regulations, Unauthorized Practice of Law (UPL) guidelines, registration forms, attorney compliance certification form, and surety bond forms may be obtained at http://www.vsb.org/site/regulation/crespa/.

UPL Op.#183 was approved by the Virginia Supreme Court on September 25, 1998, but the opinion was revised to explicitly recognize the right of lay settlement agents, as authorized under CRESPA, to close residential real estate transactions. Thereafter, the General Assembly acted again in this area by enacting the Real Estate Settlement Agent Registration Act (Va. Code §§6.1-2.30, et seq.) which became effective July 1, 1999. This new act states that if a nonlawyer is properly registered as a CRESPA settlement agent, he or she may perform escrow, closing and settlement services for any real estate located in the Commonwealth. Thus, properly registered lay settlement agents may now handle commercial as well as residential closings. Attorneys, however, are not required to meet CRESPA's requirements in order to close commercial real estate transactions.

Summary courtesy of the Virginia State Bar
3/30/00

contact text

Email: crespa@scc.virginia.gov Phone: (804) 371-9465