CHAPTER 2702. CLOSING AND SETTLEMENT - Texas Statutes

INSURANCE CODE

TITLE 11. TITLE INSURANCE

SUBTITLE E. THE BUSINESS OF TITLE INSURANCE

CHAPTER 2702. CLOSING AND SETTLEMENT

SUBCHAPTER A. INSURED CLOSING AND SETTLEMENT LETTERS

Sec. 2702.001. INSURED CLOSING AND SETTLEMENT LETTER: LOANS.

(a) On request, a title insurance company may issue insured

closing and settlement letters in connection with the closing and

settlement by a title insurance agent or direct operation of

loans relating to real property located in this state.

(b) Insured closing and settlement letters must be issued in the

form prescribed by the commissioner.

(c) A title insurance company may not impose a charge for

issuing insured closing and settlement letters under this

section.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1,

2005.

Sec. 2702.002. INSURED CLOSING AND SETTLEMENT LETTER: CERTAIN

BUYERS OR SELLERS. (a) On written request, a title insurance

company may issue to the buyer or seller of real property located

in this state, the sales price of which exceeds the maximum

covered claim specified by Chapter 2602, an insured closing and

settlement letter in connection with the closing and settlement

of the transaction by a title insurance agent or direct

operation. Only the title insurance company that is to issue an

owner title insurance policy in connection with the transaction

may issue the insured closing and settlement letter.

(b) An insured closing and settlement letter must be issued:

(1) at or before closing; and

(2) in the form and manner prescribed by the commissioner.

(c) The commissioner may adopt a charge for the issuance of an

insured closing and settlement letter under this section and

prescribe the form and manner in which the charge must be made.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1,

2005.

Sec. 2702.003. EFFECT OF FAILURE TO ISSUE INSURED CLOSING AND

SETTLEMENT LETTER. The failure of a title insurance company to

issue an insured closing and settlement letter does not affect

the company's liability under an issued title insurance policy.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1,

2005.

SUBCHAPTER B. UNIFORM CLOSING AND SETTLEMENT STATEMENTS

Sec. 2702.051. APPLICABILITY. This subchapter does not apply to

the closing or settlement of:

(1) a residential real property transaction regulated by the

Real Estate Settlement Procedures Act of 1974 (Pub. L. No.

93-533); or

(2) a real property transaction if the closing or settlement is

not actually handled by:

(A) a title insurance company, a title insurance agent, or an

attorney for a title insurance company or title insurance agent;

or

(B) a representative of a title insurance company, a title

insurance agent, or an attorney for a title insurance company or

title insurance agent.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1,

2005.

Sec. 2702.052. DUTY TO PRESCRIBE UNIFORM CLOSING AND SETTLEMENT

STATEMENT FORMS. (a) The department, after notice and hearing,

shall prescribe uniform closing and settlement statement forms to

be used in connection with the closing and settlement of a

transaction involving:

(1) the conveyance or mortgage of real property; and

(2) the issuance of a title insurance policy by a title

insurance company or title insurance agent.

(b) The department may prescribe separate forms under this

section for transactions involving improved residential real

property and for all other real property transactions.

(c) The department shall design the forms under this section to

enable each party to the transaction to be provided with a dual

or separate form identifying only the charges made to that party.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1,

2005.

Sec. 2702.053. CONTENT OF CLOSING AND SETTLEMENT STATEMENT. (a)

Each closing and settlement statement provided to a party to a

transaction described by Section 2702.052(a) must state the name

of any person receiving any amount from that party.

(b) Notwithstanding Subsection (a), the title insurance company

or title insurance agent is required to include in the closing

and settlement statement only those items of disbursement that

are actually disbursed by the company or agent.

(c) If an attorney, other than a full-time employee of the title

insurance company or title insurance agent, examines a title or

provides any closing or settlement services, the closing and

settlement statement must include:

(1) the amount of the fee for the services, shown as included in

the premium; and

(2) the name of the attorney or, if applicable, the name of the

firm to which the fee was paid.

(d) The closing and settlement statement must conspicuously and

clearly itemize the charges imposed on the party in connection

with the closing and settlement.

(e) If a charge for title insurance is made to the party, the

closing and settlement statement must state whether the title

insurance premium included in the charge covers the mortgagee's

interest in the real property, the borrower's interest, or both.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1,

2005.

Sec. 2702.054. USE OF ALTERNATE SETTLEMENT STATEMENT FORM

PERMITTED. A title insurance company or title insurance agent

may use the uniform settlement statement form prepared under the

Real Estate Settlement Procedures Act of 1974 (Pub. L. No.

93-533) instead of the uniform closing and settlement statement

form prescribed by the department under this subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1,

2005.

SUBCHAPTER C. ADVANCE DISCLOSURE OF CLOSING AND SETTLEMENT COSTS

IN TRANSACTIONS INVOLVING RESIDENTIAL REAL PROPERTY

Sec. 2702.101. APPLICABILITY. This subchapter does not apply to

the closing or settlement of a real property transaction if the

closing or settlement is not actually handled by:

(1) a title insurance company, a title insurance agent, or an

attorney for a title insurance company or title insurance agent;

or

(2) a representative of a title insurance company, a title

insurance agent, or an attorney for a title insurance company or

title insurance agent.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1,

2005.

Sec. 2702.102. DUTY TO PROVIDE ADVANCE DISCLOSURE OF CLOSING AND

SETTLEMENT COSTS. (a) Except as provided by Subsection (c), on

the written request of the buyer, seller, or borrower before the

closing and settlement of a transaction involving improved

residential real property, a title insurance company or title

insurance agent shall, in connection with the issuance of any

kind of title insurance policy guaranteeing a lien on or the

title to the property, provide to the requesting party an

itemized disclosure of each charge to be made to that party that

arises in connection with the closing and settlement.

(b) The itemized disclosure must be provided on a closing and

settlement statement form prescribed or permitted under

Subchapter B.

(c) The title insurance company or title insurance agent is

required to provide the itemized disclosure only to the extent

that information is available concerning each charge to be made

to the party. If information concerning a charge is not

available, the title insurance company or title insurance agent

shall:

(1) make a notation that the charge is to be made but that the

information is not available or that the amount shown is an

estimate of the charge; and

(2) advise the party in writing as to the identity of the person

or organization responsible for the charge.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1,

2005.

Sec. 2702.103. TITLE INSURANCE COMPANY OR TITLE INSURANCE AGENT

NOT SUBJECT TO REQUIREMENTS APPLICABLE TO LENDERS. (a)

Notwithstanding Section 2702.102, a title insurance company or

title insurance agent is not required to disclose a cost or

charge that a lender is required by law to disclose to a party.

(b) Section 2702.102 does not impose on a title insurance

company or title insurance agent any obligation imposed on a

lender by the Real Estate Settlement Procedures Act of 1974 (Pub.

L. No. 93-533).

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1,

2005.