Tuesday, January 26th, 2010Some settlement companies, such as Fidelity National Title Insurance Company, have refused to complete a Qualified Substitute affidavit to assist their buyer-clients in complying with FIRPTA (Foreign Investment in Real Property Tax Act), according to reports from C.A.R. members. Such refusal generally forces a buyer seeking to comply with FIRPTA to obtain a Seller’s Affidavit of Nonforeign Status (C.A.R. Form AS or equivalent) containing the seller’s social security number, or withhold 10 percent of the sales price to remit to the IRS, as further explained below.
Despite certain companies’ refusal to act as qualified substitutes, C.A.R. has verbally confirmed that title giant First American Title Insurance Company, among other companies, will continue to provide Qualified Substitute affidavits and other FIRPTA compliance services. Before selecting escrow and title companies for a transaction, REALTORS® and their clients are strongly encouraged to check whether the settlement agent provides FIRPTA qualified substitute services, if such services are desired. Be aware that companies refusing to provide qualified substitute services may also attempt to disavow responsibility under FIRPTA by getting their buyer-clients to sign liability waivers.
To help REALTORS® keep track of qualified substitutes, C.A.R.’s Legal Department will create a FIRPTA Qualified Substitute Services webpage to post member-generated lists of settlement companies that will, and those that will not, provide FIRPTA qualified substitute services. REALTORS® with first-hand knowledge of a particular escrow or title insurance company that will or will not provide FIRPTA qualified substitute services may email that information to C.A.R. at candicem@car.org. Be sure you provide all of the following information for posting on C.A.R.’s FIRPTA Qualified Substitute Services webpage:
Continue reading: CERTAIN COMPANIES REFUSE TO ACT AS FIRPTA QUALIFIED SUBSTITUTES
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