| 1 | 1 | | |
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| 2 | 2 | | <BillNo> <Sponsor> |
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| 3 | 3 | | |
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| 4 | 4 | | HOUSE BILL 137 |
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| 5 | 5 | | By Barrett |
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| 6 | 6 | | |
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| 7 | 7 | | |
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| 8 | 8 | | HB0137 |
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| 9 | 9 | | 001189 |
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| 10 | 10 | | - 1 - |
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| 11 | 11 | | |
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| 12 | 12 | | AN ACT to amend Tennessee Code Annotated, Title 56, |
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| 13 | 13 | | Chapter 35 and Title 66, relative to real property |
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| 14 | 14 | | transactions. |
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| 15 | 15 | | |
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| 16 | 16 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE: |
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| 17 | 17 | | SECTION 1. Tennessee Code Annotated, Title 56, Chapter 35, Part 1, is amended by |
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| 18 | 18 | | adding the following as a new, appropriately numbered section: |
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| 19 | 19 | | (a) As used in this section: |
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| 20 | 20 | | (1) "Mortgage lender" has the same meaning as defined in § 47-32-102; |
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| 21 | 21 | | (2) "Mortgage loan broker" has the same meaning as defined in § 47- |
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| 22 | 22 | | 32-102; and |
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| 23 | 23 | | (3) "Mortgage loan servicer" has the same meaning as defined in § 47- |
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| 24 | 24 | | 32-102. |
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| 25 | 25 | | (b) Subject to any right of approval by a mortgage lender, mortgage loan |
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| 26 | 26 | | broker, or mortgage loan servicer, where those persons or entities are involved in a real |
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| 27 | 27 | | property transaction, a purchaser or borrower in a real property transaction in this state |
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| 28 | 28 | | has the exclusive right to select the settlement agent in connection with the transaction. |
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| 29 | 29 | | The selected settlement agent is exclusively authorized: |
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| 30 | 30 | | (1) To provide escrow or closing services in connection with the transfer |
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| 31 | 31 | | of interests in real property or the making of loans secured by interests in real |
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| 32 | 32 | | property; |
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| 33 | 33 | | (2) To act as the title insurance agency; and |
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| 34 | 34 | | (3) To perform those functions and obtain documentation necessary to |
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| 35 | 35 | | clear title for the real property involved in the transaction in accordance with |
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| 36 | 36 | | |
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| 37 | 37 | | |
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| 38 | 38 | | - 2 - 001189 |
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| 39 | 39 | | |
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| 40 | 40 | | those underwriting rules and standards prescribed by the title insurance |
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| 41 | 41 | | company that the settlement agent represents. |
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| 42 | 42 | | (c) The seller in a real property transaction in this state shall not require the use |
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| 43 | 43 | | of a particular settlement agent by the purchaser in connection to the transaction. |
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| 44 | 44 | | (d) The provisions in subsections (b) and (c) may not be waived or modified by a |
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| 45 | 45 | | party to a transaction. |
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| 46 | 46 | | (e) This section does not prohibit a seller from retaining an attorney licensed |
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| 47 | 47 | | pursuant to § 23-1-104 to represent the seller's interests and provide legal advice |
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| 48 | 48 | | pertaining to escrow or closing services. Representation must be limited to deed |
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| 49 | 49 | | preparation, fee negotiation, review and signing of applicable closing documents, and |
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| 50 | 50 | | advising the seller on legal matters related to the escrow or closing process. The |
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| 51 | 51 | | settlement agent chosen pursuant to subsection (b) shall not collect any fees from a |
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| 52 | 52 | | represented seller payable to the settlement agent or its subsidiaries, affiliates, or |
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| 53 | 53 | | subcontractors, other than those fees and reasonable charges related to the clearing of |
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| 54 | 54 | | title, without first obtaining the written consent of the seller's attorney. |
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| 55 | 55 | | SECTION 2. This act takes effect on July 1, 2025, the public welfare requiring it. |
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