(a) In connection with any transaction involving the purchase or sale of a fee simple possessory interest (title evidencing beneficial ownership) in real property in this state, the person conducting or handling the settlement, at or before the closing of settlement and disbursement of any funds, shall obtain from the purchaser a statement in writing that the purchaser has received a notice that owner’s title insurance may be available to the purchaser and that the purchaser does or does not desire to purchase the insurance coverage. The notice shall not be required of a trustee under a deed of trust or in transactions that are to convey only a security interest in the property of an existing owner. In addition, notice under this section is not intended to duplicate and shall not be required where, in connection with the issuance of a mortgagee‘s title policy, notice with respect to owner’s title insurance is given pursuant to rules of the department under this chapter. The notice may be combined with or attached to any other notices required of the purchaser; provided, that the notice required by this section is separately signed.

Terms Used In Tennessee Code 56-35-133

  • Deed: The legal instrument used to transfer title in real property from one person to another.
  • Department: means the department of commerce and insurance. See Tennessee Code 56-1-102
  • Fee simple: Absolute title to property with no limitations or restrictions regarding the person who may inherit it.
  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Mortgagee: The person to whom property is mortgaged and who has loaned the money.
  • Person: means an individual, firm, association, partnership, estate, trust, fiduciary, syndicate or corporation. See Tennessee Code 56-35-102
  • Policy: means any instrument, contract or agreement whereby and whereunder title insurance companies insure or guarantee titles to real property, or interests therein, or liens or encumbrances on the property, as defined in subdivision (11). See Tennessee Code 56-35-102
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • signed: includes a mark, the name being written near the mark and witnessed, or any other symbol or methodology executed or adopted by a party with intention to authenticate a writing or record, regardless of being witnessed. See Tennessee Code 1-3-105
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Trustee: A person or institution holding and administering property in trust.
(b) The following or any other substantially similar form shall be sufficient for the purposes of this section:

Notice and Acknowledgment With Respect to Owner’s Title Insurance

RE: ____________________ (address or brief property description)

Pursuant to § 56-35-133, the undersigned purchaser or purchasers, hereby acknowledge(s) that they have received a notice that owner’s title insurance may be available to them at their expense.

____________________ I(we) hereby desire to obtain owner’s title insurance.

____________________ I(we) hereby decline to obtain owner’s title insurance.

Tennessee law requires that you sign this acknowledgment. I (we) further acknowledge that the settlement agent in this transaction [or insert name of settlement agent here] shall have no responsibility to the undersigned for the status of the title to the real estate we are purchasing.

____________________

Signature of Purchaser or

Purchasers

Date: ____________________

Click here to view form.

(c) In the event that the person conducting or handling the settlement shall fail to obtain from the purchaser the statement required by this section, the closing or settlement agent may cure the omission at any time subsequent to the closing of settlement but prior to actual or constructive notice of a claim or possible claim against the title of the real estate that was the subject of the settlement by sending a certified letter, return receipt requested, to the last known address of the purchaser, which includes the notification provided in this section.
(d) The notification provided by this section shall not be required in any of the following transactions:

(1) A judicial or nonjudicial foreclosure;
(2) A sale pursuant to a court decree;
(3) A tax sale;
(4) A transfer evidenced by a deed upon which recording tax is not payable pursuant to § 67-4-409; or
(5) Any transaction wherein the purchaser has elected to obtain owner’s title insurance or wherein the seller has elected to provide owner’s title insurance to the purchaser.
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