Q: I bought my house in Virginia in 1982, and the seller took back a three-year second mortgage. This June, I went to the law firm that handled the settlement and requested that they figure out how much money I owe the second mortgage holder. I wanted to pay him off and get a release on the deed of trust.
The lawyer told me that he would write the seller a letter with my check enclosed for the balance of the payment, and have the seller send him a release. The lawyer said he would have the deed released at the clerk's office and send it to me.
The fee quoted by the lawyer was $35 for him and $5 for recording the release at the clerk's office. The lawyer told me to write a check for $40, which I did.
Shortly thereafter, I received a letter from the lawyer stating that he had my papers from the seller but no record of my payment. He then indicated that his fee was $75 plus a $5 recording fee. He said that, if I had paid him earlier, I should send him a copy of the canceled check.
I wrote the lawyer and sent him a photocopy of both sides of my canceled check, and reminded him that the original fee agreed upon was $35. I have not heard from the lawyer since and have not received my papers. What recourse do I have now?
A: You have several avenues of recourse, but the first step should be a direct confrontation with the lawyer. It might make sense to set up an appointment to see him, and hopefully the matter will be resolved on a peaceful and friendly basis. There may have been a good-faith misunderstanding between the two of you.
On the other hand, if the lawyer refuses to meet with you or continues to demand the higher fee, I strongly suggest that you contact the bar associations for Virginia (in Richmond) and for the county in which the lawyer's principal office is situated. Bar associations have become quite responsive in recent years to legitimate grievances between client and lawyer.
I suspect that, if the lawyer receives an inquiry from the bar association, he will agree to complete the job for the original fee.
Clearly, you need a release of that outstanding deed of trust. When you go to sell the property, or if you ever intend to refinance, no new lender will even want to touch the property until you have released the old deed of trust from the land records.
You also should contact the seller/lender directly to make sure that payment has been made in full and to find out whether the lender returned any papers to the lawyer.
It is important to remember that, when you purchased your property in 1982, you signed a promissory note and agreed to pay the seller a certain sum of money within three years. You also signed a deed of trust (otherwise known as a mortgage) that was recorded upon the land records in the county in which the property is situated. The purpose of recording the deed of trust is to put the world on notice that there is a cloud -- lien -- on your property. Obviously, once you pay that promissory note, you want to release that lien from the land records.
But of equal importance, you must get back the original promissory note, marked "paid and canceled." This will enable the trustee to release the deed from the land records. It also will enable you to rest peacefully at night, knowing that no one can call you up suddenly, claim to be the note holder and say that you still owe the money on that note.
A promissory note is a valuable, significant document. You cannot have it floating around once you have paid it off in full. In fact, it is always a good idea when dealing with a private lender to physically exchange the full and final payment for the original promissory note -- and make sure that it is appropriately marked "paid and canceled."
I cannot believe that the lawyer will give you a hard time, especially if you discuss your complaint directly with him. However, if the lawyer is reluctant to take further action until you pay the additional amount, I suggest that you contact the local bar associations, which have significant clout.