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What is a title company referral? Fla. creates rules

 

TALLAHASSEE, Fla. – Jan. 14, 2016 – The Florida Department Of Financial Services Division of Insurance Agents and Agency Services filed a notice on title-agency-referral rules (Rule No. 69B-186.010) that could become effective soon.

While real estate brokers and agents generally understand the rules regarding title company referrals, this new rule provides a fairly specific list of forbidden activities.

According to the Department, a referrer can be almost everyone involved in a real estate transaction, including "a title insurance agent, title insurance agency, title insurance company, attorney, real estate broker, real estate agent, real estate licensee, broker associate, sales associate, mortgage banker, mortgage broker, lender, real estate developer, builder, property appraiser, surveyor, escrow agent, closing agent, or any other person or entity involved in a real estate transaction for which title insurance could be issued."

The Department lists 18 examples of banned referral activities for title companies. High profile ones include:

  • Furnishing office equipment (fax machines, telephones, copy machines, etc.)
  • Paying for cellphone contracts
  • Providing simulated panoramic home and property tours to real estate brokers or real estate sales associates
  • Providing gift cards for settlement service referrals or to a purchaser or prospective purchaser of title insurance
  • Sponsoring or hosting open houses for real estate brokers or associates
  • Paying for food, beverages or room rentals at events if designed to promote the business of a referrer (other than a title insurer event)
  • Paying advertising costs of real estate brokers or associates via publications, signs, emails, websites, web pages, banners or other forms of media
  • Noting that real estate brokers or agents have any type of preferred status or endorsing them in publications, signs, emails, websites or other forms of media

The rule also includes a list of acceptable referral activities.

While the Department's rule still isn't final, it will likely become a regulation. To read the complete rule, visit the Florida Department Of Financial Services' website.

© 2016 Florida Realtors®  

Related Topics: Legal