By: Laubenberg H.B. No. 3532
A BILL TO BE ENTITLED
AN ACT
relating to title insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Art. 9.02. Definitions
(a) "Title Insurance" means insuring, guaranteeing or
indemnifying owners of real property or others interested therein
against loss or damage suffered by reason of liens, encumbrances
upon, or defects in the title to said property, and the invalidity
or impairment of liens thereon, or doing any business in substance
equivalent to any of the foregoing in a manner designed to evade the
provisions of this Act. Title insurance does not include mortgage
insurance, mortgage pool guaranty insurance or lender's errors and
omission insurance.
(e) "[Board] Department" means the [State Board of
Insurance] Texas Department of Insurance of the State of Texas.
(1) "Person" includes individuals, corporations,
[associations,], limited liability companies, partnerships and
trusts.
(n) "Closing the Transaction" means the investigation made
on behalf of [a title insurance company, title insurance agent, or
direct operation] a consumer or purchaser of a title insurance
policy before the actual issuance of the title policy to determine
proper execution, acknowledgement, and delivery of all
conveyances, mortgage papers, and other title instruments which may
be necessary to the consumation of the transaction and includes the
determination that all delinquent taxes are paid, all current
taxes, based on the latest available information, have been
properly prorated between the purchaser and seller in the case of an
owner policy, the consideration has been passed, all proceeds have
been properly disbursed, a final search of the title has been made,
and all necessary papers have been filed for record.
(r) "Producer" means a real estate broker or agent, lender,
mortgage company, mortgage broker, loan officer, builder,
developer, attorney, real estate firm or an affiliate of a
producer.
SECTION 2. [Art. 9.09A. Prohibiting Unmarketablility of
Title Insurance
An insurance company may not insure against loss or damage by reason
of unmarketability of title. The commissioner may not promulgate
rules or forms providing for that coverage.]
SECTION 3. Art. 9.07C. Area and Boundary Coverage
(c) A title insurance company may not discriminate in
providing area and boundary coverage in connection with residential
real property solely because:
(1) the real property is platted or unpolluted; or
(2) a municipality did not accept a subdivision plat
in relation to the real property before September 1, 1975.
(3) the proposed insured or insured is not a lender
SECTION 4. Art. 9.30. Rebates and Discounts
(b) This Article may not be construed as prohibiting:
(7) Notwithstanding any provision of this Article
9.30, no person doing the business of title insurance shall,
directly or indirectly, pay, give, provide, allow or permit
anything of value to a real estate broker, real estate agent,
builder, developer, attorney, lender, mortgage broker, loan
officer, mortgage company, bank, savings association, credit
union, architect, appraiser, real estate firm, real estate
investment trust, or any other Producer.
(f) No person shall mark-up, add to, up charge, or
overcharge for any service or product provided by a third party to a
consumer or proposed insured or insured in a real estate
transaction. Any person marking-up, adding to, up charging or
overcharging for any service or product in a real estate
transaction, and in addition to any other penalty or damages, after
notice and opportunity for a hearing, is subject to a monetary
forfeiture not less than five times the value of the mark-up,
addition-to, up charge or overcharge.
(g) Any action pursuant to this Article may brought in a
state court or other court of competent jurisdiction without regard
to the amount of damages.
SECTION 5. Art. 9.39B Interest form Escrow and Trust
Accounts of a Title Insurance Company, Direct Operation or Title
Insurance Agent
All interest from escrow and trust fund accounts held by a
title insurance company, direct operation or title insurance agent,
unless directed otherwise by the owner of the funds, shall be paid
to the Texas Department of Housing and Community Affairs for the
purpose of assisting individuals or families of low, very low or
extremely low incomes who are not assisted by private enterprise or
other governmental programs to obtain affordable housing.
SECTION 6. This Act takes effect September 1, 2003.