New TN Title-Splitting Law: Effective July 1, 2026
The only thing constant in Tennessee Title Law is change. Effective July 1, 2026, there are changes to the TN Code re: title splitting. This doesn’t affect consumers, but realtors can serve their clients with peace of mind if they understand the changes. Don’t panic. Split closings can still happen. This new law only impacts the title premiums for those closings.
What are Split Closings?
Split closings are commonplace (and still legal) in Tennessee. A “split closing” is one where the buyer and seller work with separate title companies/title attorneys. “Title splitting” or premium sharing is when the premiums for split closings are themselves split between the closing title companies facilitating the transaction.
What Does the Law Say?
The Amendment to SB 394/HB 569:
Requires two title insurance agencies that separately represent the buyer and seller in a real estate transaction that agree to an arrangement to share the title insurance premiums, commissions, or other fees paid by the buyer and seller, to:
(1) provide written notice to the buyer and seller that such fees will be shared; and
(2) obtain signed, written acknowledgement from both the buyer and the seller of the agencies' intent to share such fees.
Specifies that a title insurance agency is not required to participate in an arrangement to share the title insurance premiums, commissions, or other fees paid by the buyer and seller in a real estate transaction.
Prohibits a Seller title insurance agency from purporting that it will accept, assume, share, or guarantee a liability for losses arising under a title insurance policy that the title insurance agency did not issue.
Authorizes the settlement agency that is listed as the selected settlement agency for the purchaser or borrower in a real property transaction to act as the issuing title insurance agency, subject to any rights of approval by a mortgage lender, mortgage loan broker, or mortgage loan servicer. Specifies that this act only applies to transactions involving the purchase of or lending on the security of real property located within this state that contains between one and four residential dwelling units.
Exempts the first-time sale of new construction real property containing no less than one nor more than four residential dwelling units, or new construction condominium or single-family residences that are part of a development containing more than four residential dwelling units, or the sale of real property by auction from the authorizations above.
What’s The Impact?
Nothing really changes for buyers, sellers or realtors. This legislation only affects behind the scene working relationships between buyer and seller title agencies and attorneys.
We Keep Buyers, Sellers, and Realtors Informed
Tennessee title law has ups and downs. Keeping track of the changes, and their implications, means our expert Tennessee Title Attorneys can provide you with (and your real estate clients) with the best possible service. Whatever happens, we’ll ensure closings are streamlined, timely, and easily understood by all parties. Have questions about an upcoming real estate transaction? Book a complimentary consultation with our attorney today, and get the answers you need.
