Services - title insurance inducements rules
1. May a title company allow a real estate broker to use its fax machine to conduct real estate business (to receive offers, counteroffers, etc.) even if the title company is providing the title and/or escrow as part of the transaction?
No. This is specifically prohibited. See WAC 284-29-260(8) (www.app.leg.wa.gov) for details.
2. Can a title company provide “home books” or other relocation packets to realtors that contain information about a specific real property parcel as well as general information about the area where the real property is located, for example, schools, parks, services, restaurants, etc.?
Yes, but only when the title company charges and collects the cost of producing the home book or other information. Also, the home book or other information cannot contain any information or material that is primarily for the use of the realtor (open house sign-in sheet, etc.). Even if information contained in a home book is readily available at no cost to the title company, the home book itself is not “free,” as title insurance personnel incur time and expense to collect and distribute the information. See WAC 284-29-210 (www.app.leg.wa.gov).
3. May a title company advance recording fees and only bill or invoice for the fees once a month, and receive a lump-sum payment for the monthly billing?
No. WAC 284-29-255(5) (www.app.leg.wa.gov) allows a title company to advance recording fees, but only if it is actually repaid promptly. Based upon title insurance industry practice, payment once a month is not “promptly.”
4. Can a title company teach a free title or escrow education course for a trade association and not have it count as one of its three sponsorship opportunities?
No. The title company must count the course as one of its sponsorship opportunities. It’s considered a donation or contribution for an educational seminar. See WAC 284-29-220(6)(b) (www.app.leg.wa.gov) for details.
5. Is it legal for a title company to provide a producer information on deed position and encumbrances for a parcel of property that is going up for foreclosure auction?
It's legal only if the title company charges and receives payment for the information. See WAC 284-29-210(5) (www.app.leg.wa.gov) for details. However, if in providing this information, the title insurance company provides any assurances as to the information's accuracy, then the title company could be issuing a title insurance policy. This would then require the title company to submit the appropriate rate-and-form filing to our office.
6. Can a home warranty company that's affiliated with a title company give away free items of value the title company cannot give to producers? For example, free marketing templates the producer can customize with his or her contact information.
Yes, but only if the items are not given by, through, or in conjunction with the title company or its employees, agents, etc. The title inducement requirements don't apply to home warranty salespeople, but they do apply to title companies and their employees. See RCW 48.29.210 (www.app.leg.wa.gov) for details.
7. The Multiple Listing Service (MLS) recently changed its requirements directing realtors to attach an “accurate and correct” or “Exhibit A” legal description to their MLS listing. As a result, realtors are requesting that title companies conduct additional research beyond just giving a copy of the last deed of record to comply with this new requirement. Is a title company allowed to provide an “accurate and correct” or “Exhibit A” legal description to realtors?
No. A title company cannot give anything of value to a producer of title business, such as a realtor, except as permitted by rules adopted by the Commissioner. A title company cannot give anything of value to a producer unless it’s clearly and specifically permitted by the rules. The rules only permit title companies to give a copy of the last deed appearing of record. Therefore, since the providing of an “accurate and correct” or “Exhibit A” legal description is not clearly and specifically permitted in any of the rules, it is prohibited. See RCW 48.29.210(2), WAC 284-29-210, and WAC 284-29-260 (www.app.leg.wa.gov).