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Regular Session, 2012
SENATE BILL NO. 425
BY SENATOR CLAITOR
COMMERCIAL REGULATIONS. Prohibits required use of settlement service providers
in residential real estate transactions. (8/1/12)
AN ACT1
To enact R.S. 51:1428, relative to unfair trade practices and consumer protection; to prohibit2
the required use of settlement service providers in residential real estate transactions;3
to provide certain definitions, terms, and requirements; and to provide for related4
matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 51:1428 is hereby enacted to read as follows: 7
§1428. Unfair or deceptive acts or practices; prohibition against required use8
of settlement service providers in residential real estate9
transactions10
A. For the purposes of this Section, the following terms and phrases11
shall have the following meanings:12
(1) "Purchaser" means any person who, using the proceeds of a federally13
related mortgage loan, contracts to acquire residential real estate in this state.14
(2) "Residential real estate" means any immovable property in this state15
upon which at least one, but not more than four, buildings or structures are16
situated, each of which are occupied or intended for occupancy as single family17 SB NO. 425
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residences.1
(3) "Federally related mortgage loan" means any loan defined as a2
"federally related mortgage loan" under the provisions of 12 U.S.C. §2602(1)3
of the Real Estate Settlement Procedure Act.4
(4) "Settlement services" means any service defined as a "settlement5
service"under the provisions of 12 U.S.C. §2602(3) of the Real Estate Settlement6
Procedure Act.7
B. No contract to sell or purchase residential real estate executed in this8
state shall contain any provision requiring the purchaser of such residential9
property, as a condition of such sale, to use a specific provider of settlement10
services.11
C. No person shall deprive, impair, diminish, or otherwise limit the12
access of a purchaser of residential real estate to any service, discount, rebate,13
or other economic incentive by making such access contingent on that14
purchaser's use of a specific provider of settlement services.15
D. No person shall impose upon a purchaser of residential real estate an16
economic disincentive or penalty based on the failure or refusal of such17
purchaser to use a specific provider of settlement services.18
E. Any violation of this Section shall be a deceptive and unfair trade19
practice and shall subject the violator to any and all penalties provided for in20
this Chapter.21
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 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
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 SB NO. 425
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
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 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 1, 2012.
(Adds R.S. 51:1428)