A New York title company searches the public records for the property, reports what it finds and works with the attorneys to clear problems before closing. It sends a closer to the closing to collect title charges and take the documents for recording. Then it issues the owner’s and loan title insurance policies.
In most New York deals, the “title company” is a licensed title agency working for a title insurer, also called the underwriter. The agency does the work. The insurer carries the risk on the policy.
This guide covers New York State rules, with notes on New York City. For how the attorneys, the title agency, the lender’s attorney and the closer split the work on closing day, see who does what at a New York closing.
Title agency vs title insurer
“Title company” is an everyday term, not a legal one. It usually means one of two businesses.
| Title agency (agent) | Title insurer (underwriter) | |
|---|---|---|
| What it is | Licensed agent | Insurance company |
| Regulated by | DFS | DFS |
| Searches and clears title | Yes | Sometimes, through direct offices |
| Bears the policy risk | No | Yes |
| Whose contract the policy is | Not the agent’s | The insurer’s |
The title insurer is the insurance company that writes the policy and pays covered claims. It must be licensed by the state’s insurance regulator, the New York State Department of Financial Services (DFS). Its rates and policy forms must be filed with and approved by DFS (DFS, Title Insurance; state insurance law).
The title agency is the business most buyers and attorneys deal with. New York law defines a title agent by its work. It sells or negotiates title policies and decides, based on a title search, whether a property can be insured. It also does at least one core task: collecting premiums or escrow money, preparing the title report, preparing the policy, or negotiating how title problems get cleared.
An agency can be appointed by several insurers and place a given policy with any of them. Some insurers also run their own direct offices that do the same work without a separate agent.
How title agents are licensed
Since the fall of 2014, anyone paid to act as a title agent in New York must hold a DFS license. The licensing law was passed in the 2014 state budget (NYS Comptroller audit, 2019). Individuals must complete at least 20 hours of pre-licensing education and pass a state exam. New York attorneys in good standing skip the course and exam but still need the license.
A business is licensed through at least one named individual, called a “sublicensee” (DFS title agent licensing FAQs). A license alone is not enough. The insurer must file an appointment for the agent with DFS within 15 days of signing the agency contract or receiving the first application. A licensed agent with no appointment is inactive and cannot do business (same FAQs).
To check a company, search its name in the DFS Producer/Licensee Search.
What a title company does, from order to policy
- Order. The buyer’s attorney orders title, or the lender does in a refinance. The order gives the address, tax lot, parties, and the price or loan amount.
- Search. The company searches the chain of ownership, mortgages, liens, judgments, taxes and water charges. It runs name searches, such as bankruptcy and Patriot Act checks. In New York City it also orders searches of city department records for building, fire, housing and other violations. Records for Manhattan, Brooklyn, Queens and the Bronx are in ACRIS; Staten Island and Westchester records are at the county clerk.
- Examination. An examiner decides what the insurer will insure, what it will leave out of coverage as an “exception” and what must be cleared first.
- Title report. The report is the commitment to insure, listing requirements and exceptions. State rules say it must be delivered at least three days before the scheduled closing. See title search and title report in New York.
- Clearing. The company and the attorneys remove items with payoff letters, satisfactions (recorded proof a debt was paid), affidavits, or proof that a judgment belongs to someone else. See what happens when a lien or judgment turns up.
- Closing. The title closer updates the search to the closing date, marks up the report, collects the premium, fees and taxes, and takes mortgage payoffs. The agency or insurer is responsible for its closer’s acts in issuing the policy (state rules).
- Recording. It records the deed and mortgage and pays the taxes collected at closing.
- Policy. It issues the owner’s and loan policies on the insurer’s form, matching the marked-up report.
The title company does not represent the buyer, seller or lender, and does not advise whether to accept an exception. The attorneys do that.
How buyers in New York choose a title company
The buyer’s attorney usually orders title, and most buyers use the agency their attorney recommends. The choice is still the buyer’s, and three rules protect it.
The seller can’t require a particular title company. When the purchase uses a federally related mortgage loan, federal law bars the seller from requiring, directly or indirectly, that the buyer buy title insurance from a particular company. A seller who does is liable to the buyer for three times the title charges.
Lenders must say whether you can shop. For most home mortgages, the Loan Estimate lists the settlement services you may shop for. The lender must give you a written list of at least one provider for each, stating that you may pick someone else (federal rule).
Referrers with a stake must say so. Sometimes an attorney, broker, lender or other party working for a buyer, seller or lender owns or controls the title agency it refers you to. It must then give you a separate written disclosure at the time of the referral and get your signed acknowledgment (state rules). The disclosure states its interest, the expected payment and that you are free to use another company. An attorney who is also the title agent must at least tell you that you don’t have to use that agent.
Separately, a title company cannot make you buy other services as a condition of getting title insurance (state rules).
No rebates or gifts for title business
State law bars title insurers and agents from giving rebates or anything of value to win title business. It also bars the people buying the insurance, and those acting for them, including attorneys and lenders’ representatives, from accepting it. A DFS rule spells this out: meals, entertainment, gifts, outings and parties given to win title business are banned. There are narrow exceptions, such as low-value logo items and events open to the public.
That ban survived a 2019 court challenge to the DFS rule. So a title company cannot compete by discounting the premium or rewarding whoever sends the order. It competes on speed, how well it clears problems, and its fees for extra services.
“Title company near me”
Location matters less than people expect. What matters is that the company is licensed, appointed by an insurer, and experienced with the property type and county. A Manhattan co-op and a house in Yonkers involve different searches and recording offices.
How a title company is paid
A title company earns money from three items on the title bill:
- The premium, set by a rate manual filed with DFS. In New York City and Westchester the premium includes the basic title search. Premiums cannot be discounted or marked up. The agent keeps a share and sends the rest to the insurer. See what title insurance costs in NYC and Westchester.
- Ancillary fees for services the premium does not cover, such as municipal searches and recording services. An agent may charge them only under a signed written memo listing each service (state law). It must post its fees at its office and online, and give you a list of actual title costs at or before closing (state rules).
- Closer charges, such as a pick-up fee for handling a mortgage payoff. These are set by custom, not by filed rates.
Taxes and government recording fees also pass through the title company, which collects them for the government and does not keep them.
How New York differs from escrow states
In states such as Florida, a title agent or attorney typically runs the closing, and whoever handles it holds money such as the earnest money deposit in escrow (Florida consumer guide). California licenses independent escrow companies under its Escrow Law, separately from title insurers.
New York uses neither model. The seller’s attorney usually holds the contract deposit, and the attorneys run the closing. The title company holds money only for specific purposes, such as payoffs handed to its closer or a post-closing escrow it agrees in writing to hold. A title agent must hold those funds in trust for the people they belong to (state law).
Because New York does not permit closing protection letters, confirm in writing who holds any escrow and on what terms.
Official sources
- NY Insurance Law § 2101 (definition of title insurance agent, subsection (y))
- NY Insurance Law § 2119 (title agent ancillary fees, subsection (f))
- NY Insurance Law § 2120 (agents’ fiduciary duty over funds)
- NY Insurance Law § 2139 (title insurance agent licensing)
- NY Insurance Law § 6409 (title insurance forms and rates, subsections (a) and (b); inducements, subsection (d))
- 11 NYCRR § 35.4 (affiliated business and tying, subsection (e))
- 11 NYCRR § 35.5 (affiliated referral disclosures)
- 11 NYCRR § 35.6 (disclosure of fees)
- 11 NYCRR § 35.7 (delivery of the title report)
- 11 NYCRR § 35.8 (title insurance closers)
- 11 NYCRR § 228.2 (Regulation 208, prohibited inducements)
- DFS title insurance agent licensing and licensing FAQs
- DFS Producer/Licensee Search
- DFS consumer page, Title Insurance
- NYS Comptroller, Oversight of the Title Insurance Industry (2019)
- 12 U.S.C. § 2608 (RESPA Section 9, seller may not require a title company)
- 12 C.F.R. § 1026.19(e)(1)(vi) (shopping for settlement services)
- Florida Department of Financial Services, title insurance consumer guide
- California DFPI, About the Escrow Law