Letter: Candidate discusses title companies’ issues


Editor:

My name is Meghan Kelly. I am an attorney running for the House of Representatives in the 38th District, which includes Frankford, Selbyville, Ocean View, Bethany Beach and parts of Dagsboro.

One of the reasons why I am running is, two years ago, I found a problem that no one cares to fix. I care.

I found a lot of money not getting taxed by the State of Delaware relating to out-of-state real estate title insurance companies. I contacted various people and entities in an attempt to resolve the issue; however, to date, no one has addressed the problem. So, I am stepping up to confront the issue and to correct the problem.

It appears out-of-state title companies have been practicing Delaware law without a license for more than a decade. I talked with other real estate attorneys and discovered this has been a common practice for many years.

The problem arises, real estate attorneys gain work from those same title companies. So, they fear they will lose profit should they confront this misunderstanding.

The out-of-state title companies do not pay income tax in Delaware. So, the State of Delaware is not receiving income tax for this work. In addition, this has caused errors in the chain of title for deeds. So, good title may not be transferred in real estate transactions if errors are not fixed. So, I sought to correct this by discussing this with the real estate section of the Bar.

Justice Holland gave me a call and offered to draft rules, but he retired.

In addition, [state Sen. Gerald] Hocker suggested we fine the title companies for exceeding the scope of their license. I think Mr. Hocker’s idea is an excellent one.

I contacted legislators concerning this, but to date this problem has not been alleviated.

Thus, I strongly urge the Delaware Assembly to draft laws to clearly address this problem by giving notice to those out-of-state title companies with a license to sell title insurance the scope of the activities they may receive payment for in the State of Delaware. Should they exceed the scope, unless authorized permitted by law, fine them a specified amount of money.

The clarification will assist title companies in performing their work in accordance with Delaware Supreme Court case law. In addition, this correction will prevent the legislators from stepping on the Delaware Supreme Court’s toes by discussing the unauthorized practice of law.

Thank you for your kind consideration. As a future legislator, I hope to participate in this correction, but I am running not only to win — I am running to make a positive difference in the community I grew up in and love.

Thank you for supporting me in serving you.

Meghan Kelly
Dagsboro