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Who gets to pick the title company that will issue the owner policy of title insurance?
It depends on who’s paying. If the seller pays for the owner policy and the lender policy of title insurance, then the seller can choose the title company.If the buyer pays for the owner policy, the buyer gets to pick the title company and the seller can’t make the sale contingent on using a certain title company.
A seller who insists on using a certain title company for the transaction risks violating the Real Estate Settlement Procedures Act unless he pays for the owner policy and the lender policy of title insurance.
Federal agencies have been silent on situations where the seller pays for the owner policy while the buyer pays for the lender policy are RESPA violations. Several federal courts have held that a seller in this situation did not violate RESPA because the seller didn’t require the buyer to use the same title company to issue the lender policy as a condition of the sale.
Read more Legal FAQs on TexasRealEstate.com.
About ken@kenbrand.com
Ken is the General Sales Manager for The Woodlands Area Marketing Center for Better Home And Gardens Real Estate Gary Greene.
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Paradox. Surprise. Uncommon Sense. Irony. ELBs. Impressions. Observations. Less Blah Blah-More Ah-Ha.
If I can be helpful, call, text or eMail - Ken Brand | 832-797-1779 | Ken@KenBrand.com.
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