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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2011
SENATE BILL NO. 186
BY SENATOR CLAITOR
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
COMMERCIAL REGULATIONS. Prohibits kickbacks, unearned fees, and required use
of settlement service providers concerning the sale or purchase of residential real estate or
in connection with a transaction involving a federally related mortgage loan. (8/15/11)
AN ACT1
To enact R.S. 51:1428, relative to unfair trade practices and consumer protection; to prohibit2
kickbacks, unearned fees, and required use of settlement service providers in3
residential real estate transactions; and to provide for related matters.4
Be it enacted by the Legislature of Louisiana:5
Section 1. R.S. 51:1428 is hereby enacted to read as follows: 6
§1428. Unfair or deceptive acts or practices; prohibition against kickbacks,7
unearned fees, and required use of settlement service providers in residential8
real estate transactions9
A. For the purposes of this Section, the following terms and phrases10
shall have the following meanings:11
(1) "Purchaser" means any person who, using the proceeds of a federally12
related mortgage loan, contracts to acquire residential real estate in this state.13
(2) "Residential real estate" means any immovable property in this state14
upon which at least one, but not more than four buildings or structures are15
situated, each of which are occupied or intended for occupancy as single family16
residences.17 SB NO. 186
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
(3) "Federally related mortgage loan" means any loan defined as a1
"federally related mortgage loan" under the provisions of 12 U.S.C. §2602(1)2
of the Real Estate Settlement Procedure Act.3
(4) "Settlement services" means any service defined as a "settlement4
service"under the provisions of 12 U.S.C. §2602(1) of the Real Estate Settlement5
Procedure Act.6
(5) "Settlement statement" means any form approved under the7
provisions of 12 U.S.C. §2602(1) of the Real Estate Settlement Procedure Act for8
use in residential real estate transactions involving federally related mortgage9
loans.10
(6) "Thing of value" includes any payment, advance, funds, loan, service,11
or other consideration.12
(7) "Title company" means any person qualified to issue title insurance13
in this state, directly or through its agents, and also refers to any duly14
authorized agent of a title company.15
B. No person shall give and no person shall accept any of the following:16
(1) Any fee, kickback, or thing of value pursuant to any agreement or17
understanding, oral or otherwise, that business incident to or a part of a18
settlement service involving a federally related mortgage loan shall be referred19
to any person.20
(2) Any portion, split, or percentage of any charge made or received for21
the rendering of a settlement service in connection with a transaction involving22
a federally related mortgage loan other than for services actually performed.23
C. No contract to sell or purchase residential real estate executed in this24
state shall contain any provision requiring the purchaser of such residential25
property, as a condition of such sale, to use a specific provider of settlement26
services.27
D. No person shall deprive, impair, diminish, or otherwise limit the28
access of a purchaser of residential real estate to any service, discount, rebate,29 SB NO. 186
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words in boldface type and underscored are additions.
or other economic incentive by making such access contingent on that1
purchaser's use of a specific provider of settlement services.2
E. No person shall impose upon a purchaser of residential real estate an3
economic disincentive or penalty based on the failure or refusal of such4
purchaser to use a specific provider of settlement services.5
F. The provisions of this Section shall not be interpreted or construed to6
prohibit any of the following:7
(1) The payment of attorney fees for services actually rendered.8
(2) The payment of a fee by a title company to its duly appointed agent9
for services actually performed in the issuance of a policy of title insurance.10
(3) The payment by a lender to its duly appointed agent for services11
actually performed in the making of a loan.12
(4) The payment to any person of a bona fide salary or compensation or13
other payment for goods or facilities actually furnished or for services actually14
performed.15
(5) Payments made pursuant to cooperative brokerage and referral16
arrangements, or agreements between real estate agents and brokers.17
G. Any violation of this Section shall be a deceptive and unfair trade18
practice and shall subject the violator to any and all penalties provided for in19
this Chapter.20
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Alan Miller.
DIGEST
Proposed law prohibits any person from giving or accepting any of the following:
1. Any fee, kickback, or thing of value pursuant to any agreement or understanding that
business incident to or a part of a settlement service involving a federally related
mortgage loan shall be referred to any person.
2. Any portion, split, or percentage of any charge made or received for the rendering
of a settlement service in connection with a transaction involving a federally related
mortgage loan other than for services actually performed.
Proposed law prohibits any contract to sell or purchase residential real estate executed in this
state from containing any provision requiring the purchaser, as a condition of such sale, to SB NO. 186
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
use a specific provider of settlement services.
Proposed law prohibits any person from depriving, impairing, diminishing, or otherwise
limiting the access of a purchaser of residential real estate to any service, discount, rebate,
or other economic incentive by making such access contingent on that purchaser's use of a
specific provider of settlement services.
Proposed law prohibits any person from imposing upon a purchaser of residential real estate
an economic disincentive or penalty based on the failure or refusal of such purchaser to use
a specific provider of settlement services.
Proposed law provides that proposed law shall not be interpreted or construed to prohibit
any of the following:
1. The payment of attorney fees for services actually rendered.
2. The payment of a fee by a title company to its duly appointed agent for services
actually performed in the issuance of a policy of title insurance.
3. The payment by a lender to its duly appointed agent for services actually performed
in the making of a loan.
4. The payment to any person of a bona fide salary or compensation or other payment
for goods or facilities actually furnished or for services actually performed.
5. Payments made pursuant to cooperative brokerage and referral arrangements, or
agreements between real estate agents and brokers.
Proposed law provides that any violation of proposed law shall be a deceptive and unfair
trade practice and shall subject the violator to any and all penalties provided for in the Unfair
Trade practices and Consumer Protection Law.
Effective August 15, 2011.
(Adds R.S. 51:1428)