SENATE BILL 394
By Rose
HOUSE BILL 569
By Barrett
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.