Quality Assurance Tips to Ensure Compliance with Legal Documents

Quality Assurance Tips to Ensure Compliance with Legal Documents

The responsibility for ensuring accuracy of legal documents falls to the subrecipient agency utilizing the HOME or Affordable Housing Trust Fund (AHTF) funds to assist a client. Housing Contract Administration's Quality Assurance Team strongly recommends, in the very least, each HOME and AHTF funded agency review the promissory notes, mortgages, and deed restrictions prior to closing to avoid preventable errors. Legal document errors can be costly and time consuming to correct. As with any legal document, KHC encourages agencies to consult with their legal counsel when preparing, recording, and correcting legal documents.

Top 10 tips to ensure accuracy of legal documents with HOME and AHTF: 

1. Ensure the date of the document is the correct date. This is the date the document is executed.
2. Ensure the name of the client(s) is/are spelled correctly.
3. Ensure the unit address is spelled correctly.
4. Ensure the dollar amount of assistance listed in the document is written in numeric form (i.e., $40,000) and in text (i.e., forty thousand dollars) and that the amounts match in both instances.
5. Ensure the terms are correct per the funding agreement, KHC HOME Policy Manual, and the Application Guidelines for the specific allocation of funding being utilized. Do not assume the terms from one funding allocation to another allocation are the same; often they change from year-to-year.
6. Ensure the maturity date is calculated correctly.
7. Ensure the maturity date is written in the document correctly.
8. Ensure the execution dates and the maturity dates of the promissory note match the execution dates and maturity dates of the mortgage and the deed restriction.
9. Have the client(s) sign an Errors & Omissions agreement. This is a contract that ensures the client will re-sign the legal documents should an error be found later.
10. Read the document! In addition to the preparer reading the document, request someone else, or your legal counsel read over the document to ensure it reads correctly. If a mistake is found, retype the document. A well-prepared legal document ensures a professional image and will build confidence with your clients. If a mistake is noticed at closing and it is too late to retype the document, cross-out the mistake with a straight line, write in the correct information as neatly as possible, and have all parties initial the change.     

When sending documents to Kentucky Housing Corporation (KHC) at Project Completion Report (PCR), in addition to the note, send recorded copies of mortgages and deed restrictions. Unrecorded copies are insufficient. These documents should include the clerk's stamp indicating the document has been recorded and gives the book and page number where the document can be found.