Selection of Settlement Agent in Real Property Transaction Law

The 114th Tennessee General Assembly offiically adjourned last month. We would like to highlight one particular bill that many of our members have expressed interest in, the Selection of Settlement Agent in Real Property Transaction law (SB394/HB569).

This law requires separate title insurance agencies representing the buyer and seller in a real estate transaction to disclose in writing if they plan to share title insurance premiums, commissions, or other fees. Both the buyer and seller must also sign a written acknowledgment agreeing that they were informed of the fee-sharing arrangement. Agencies are not required to participate in these arrangements.

The law also prohibits a title insurance agency from claiming responsibility for losses under a title insurance policy it did not issue. It allows the settlement agency chosen by the buyer or borrower to serve as the issuing title insurance agency, subject to approval rights held by the lender or related mortgage parties.

These rules apply only to transactions involving residential real estate in the state with one to four dwelling units. The law does not apply to first-time sales of certain newly built homes or condos, developments with more than four units, or properties sold at auction.

If there is any additional information regarding implementation, we will provide that to our members via the weekly Digest email once it is available. 

You can read read more about this ruling below and find a comprehensive overview of all of our 2026 Legislative Accomplishments by clicking the button below.