<BillNo> <Sponsor>
HOUSE BILL 137
By Barrett
HB0137
001189
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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 title insurance agency; and
(3) To perform those functions and obtain documentation necessary to
clear title for the real property involved in the transaction in accordance with
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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 require the use
of a particular settlement agent by the purchaser in connection to the transaction.
(d) The provisions in subsections (b) and (c) may not be waived or modified by a
party to a transaction.
(e) This section does not prohibit a seller from retaining 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, and
advising the seller on legal matters related to the escrow or closing process. 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, other than those fees and reasonable charges related to the clearing of
title, without first obtaining the written consent of the seller's attorney.
SECTION 2. This act takes effect on July 1, 2025, the public welfare requiring it.