Official Summary Text
Subject to a right of approval by a mortgage lender, mortgage loan broker, or mortgage loan servicer, when persons or entities are involved in a real property transaction in this state, this bill authorizes a purchaser or borrower in such transaction to
select the settlement agent in connection with the transaction. Such selected settlement agent is exclusively authorized to do all of the following:
To provide escrow or closing services in connection with the transfer of interests in real property or the making of loans secured by interests in real property.
To act as the title insurance agency.
To perform, or direct the performance of, those functions or proceedings necessary to clear title for the real property involved in the transaction in accordance with those underwriting rules and standards prescribed by the title insurance company that the settlement agent represents.
To produce, or require the production of, any documentation necessary to clear title for the real property involved in the transaction in accordance with those underwriting rules and standards prescribed by the title insurance company that the settlement agent represents.
This bill prohibits the seller in such transaction from requiring the use of a particular settlement agent by the purchaser in connection to the transaction or conditioning the performance of any obligation under the contract upon the use of a particular
settlement agent by the purchaser. Additionally, this bill prohibits the waiver or modification of all of any of the provisions above. However, this bill does not prohibit a seller from retaining an attorney to represent the seller's best interests and
p
rovide legal advice pertaining to escrow or closing services, and performing any actions or producing any documentation required by the selected settlement agent necessary for the seller to provide clear and insurable title to the buyer in accordance with
those underwriting rules and standards prescribed by the title insurance company that the settlement agent represents, as long as such representation is limited to deed preparation, fee negotiation, review and signing of applicable closing documents, and
a
dvising the seller on legal matters related to the escrow or closing process.
This bill prohibits the selected settlement agent from collecting any fees from a represented seller payable to the settlement agent or its subsidiaries, affiliates, or subcontractors, other than those fees and reasonable charges related to the clearing
of title, without first obtaining the written consent of the seller's attorney.
ON MARCH 30, 2026, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 569, AS AMENDED.
AMENDMENT #1 rewrites the bill to, instead, provide that if two title insurance agencies that separately represent the buyer and seller agree to an arrangement to share the title insurance premiums, commissions, or other fees paid by the buyer and seller
in a real estate transaction, then the title insurance agencies must (i) provide written notice to the buyer and seller that the title insurance premiums, commissions, or other fees paid by the buyer and seller will be shared between the two title insura
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e agencies, and (ii) receive signed, written acknowledgement from both the buyer and the seller confirming that the buyer and seller were notified in writing of the title insurance agencies' intent to share the title insurance premiums, commissions, or ot
her fees paid by the buyer and seller.
This amendment prohibits a title insurance agency participating in such an arrangement from purporting to accept, assume, share, or guarantee a liability for losses arising under a title insurance policy that the title insurance agency did not issue.
This amendment clarifies that a title insurance agency is not obligated to participate in an arrangement to share the title insurance premiums, commissions, or other fees paid by the buyer and seller in a real estate transaction.
Subject to any right of approval by a mortgage lender, mortgage loan broker, or mortgage loan servicer, where those persons or entities are involved in a real property transaction, this amendment provides that the settlement agency that is listed as the
selected settlement agency for the purchaser or borrower on the contract in connection with the transaction is exclusively authorized to act as the issuing title insurance agency. The waiving or modifying to a transaction by any party is prohibited.
APPLICABILITY
This amendment applies to a transaction involving the purchase of or lending on the security of real property located within this state that contains not less than one nor more than four residential dwelling units. However, this amendment does not apply
to (i) the first-time sale of new construction real property located within this state containing no less than one, nor more than four, residential dwelling units or a new construction condominium or single-family residence that is part of a development
co
ntaining more than four residential dwelling units, or (ii) the sale of real property located in this state by auction, regardless of whether the auction is held in person or online.
Current Bill Text
Read the full stored bill text
SENATE BILL 394
By Rose
HOUSE BILL 569
By Farmer
HB0569
002209
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AN ACT to amend Tennessee Code Annotated, Title 56,
Chapter 35 and Title 66, relative to real property
transactions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 56, Chapter 35, Part 1, is amended by
adding the following as a new, appropriately numbered section:
(a) As used in this section:
(1) "Mortgage lender" has the same meaning as defined in § 47-32-102;
(2) "Mortgage loan broker" has the same meaning as defined in § 47-32-
102; and
(3) "Mortgage loan servicer" has the same meaning as defined in § 47-
32-102.
(b) Subject to any right of approval by a mortgage lender, mortgage loan broker,
or mortgage loan servicer, where those persons or entities are involved in a real property
transaction, a purchaser or borrower in a real property transaction in this state has the
exclusive right to select the settlement agent in connection with the transaction. The
selected settlement agent is exclusively authorized:
(1) To provide escrow or closing services in connection with the transfer
of interests in real property or the making of loans secured by interests in real
property;
(2) To act as the issuing title insurance agency;
(3) To perform, or direct the performance of, those functions or
proceedings necessary to clear title for the real property involved in the
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transaction in accordance with those underwriting rules and standards prescribed
by the title insurance company that the settlement agent represents; and
(4) To produce, or require the production of, any documentation
necessary to clear title for the real property involved in the transaction in
accordance with those underwriting rules and standards prescribed by the title
insurance company that the settlement agent represents.
(c) The seller in a real property transaction in this state shall not:
(1) Require the use of a particular settlement agent by the purchaser in
connection to the transaction; or
(2) Condition the performance of any obligation under the contract upon
the use of a particular settlement agent by the purchaser.
(d) The provisions in subsections (b) and (c) may not be waived or modified by
any party to a transaction.
(e) Notwithstanding this section to the contrary, a seller may retain an attorney
licensed pursuant to § 23-1-104 to represent the seller's interests and provide legal
advice pertaining to escrow or closing services. Representation must be limited to deed
preparation, fee negotiation, review and signing of applicable closing documents,
advising the seller on legal matters related to the escrow or closing process, and
performing any actions or producing any documentation required by the selected
settlement agent necessary for the seller to provide clear and insurable title to the buyer
in accordance with those underwriting rules and standards prescribed by the title
insurance company that the settlement agent represents. The settlement agent chosen
pursuant to subsection (b) shall not collect any fees from a represented seller payable to
the settlement agent or its subsidiaries, affiliates, or subcontractors without first obtaining
the written consent of the seller's attorney.
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SECTION 2. This act takes effect on July 1, 2025, the public welfare requiring it.