Title inducement rules FAQ
Submitting questions about title insurance inducements
When submitting a question, you must identity the specific section(s) or subsection(s) of WAC 284-29-200 through -265 (www.apps.leg.wa.gov) that you believe clearly addresses the subject of your question. This will ensure you receive a faster response. If you're unable to find or identify a specific regulation, then it means the practice or conduct you're asking about isn't allowed. See RCW 48.29.210(2) (www.apps.leg.wa.gov).
"Title company" includes: any title insurance company, title insurance agent or any representative or employee of either.
"Producers" includes: real estate agents and brokers, lawyers, mortgagees, mortgage loan brokers, financial institutions, escrow agents, those who lend money for the purchase of real estate or interests in real estate, building contractors, real estate developers and subdividers, and anyone else who is or may be in a position to influence the selection of a title company.
Advertising and flyers
1. May a title company co-advertise with a real estate agent?
2. May a title company that has produced a marketing template offer it to real estate agents and teach them how to use it?
3. May a title company send an email blast that includes flyers for homes that are for sale through various realtors?
4. May a title company that has, in the past, designed flyers on the side for several real estate agents continue this practice?
No. Postcards, stamps, flyers, newsletters, folders, invitations, copying, cutting, or services related to preparing any of these items are all specifically prohibited. See WAC 284-29-260(6)(m) and 284-29-205(13) (www.apps.leg.wa.gov) for details.
5. I work for or represent a title company and I used to give flyer boxes to real estate agents for free. I know that’s not allowed but may I sell them to them?
No. The rules specifically prohibit giving flyer boxes and they define “give” as including any transfer of a thing of value whether or not you receive compensation. See WAC 284-29-205(5) and (13) and 284-29-260(6)(l) (www.apps.leg.wa.gov) for details.
6. Can a title company provide self-promotional items with its logo on them to a producer if the items cost $5 or less?
Yes. As long as it costs $5 or less and the logo is pre-printed on the self-promotional items - stickers with the logo on it cannot be attached to the items. See WAC 284-29-225 (www.apps.leg.wa.gov) for details.
7. If a title company provides transaction coordination services for a producer and the producer compensates the title company for those services, can the title company employee performing the service include the producer's information in their email signature?
No. A title company must not directly, indirectly, by payment to a third-party, or otherwise, use any means of communication or media to advertise on behalf of, for, or with a producer. See WAC 284-29-215(2) (www.apps.leg.wa.gov) for details.
8. Can title company staff buy an ad in a newspaper and use testimonials from real estate agents, and identify the agents and the office they work for in the ad?
9. Can a title company provide contact information on its website to a listing of homeowners associations in their county?
This is permitted. Homeowners associations are not producers.
10. Can a title company provide a link on its website to a county association of realtors?
This is permitted. The title company website may link to a trade association's website.
11. I manage a title company. Consumers whose homes are worth less than what they owe on their mortgages often ask us to recommend a short sale negotiation company to help in selling their home. We usually recommend an independent company, with whom we have no financial or other business connection. The negotiators do not refer title insurance or escrow business. The negotiators at this company are licensed real estate agents, as required by the Department of Licensing, but they do not list or sell property like a typical agent. Because we find their services both necessary to our customers and professionally sound, we would like to advertise with this company. No money will change hands and the ad will simply let customers know we can provide information about and access to this company’s services, if needed. Can we advertise with this company without violating WAC 284-29-215 (www.apps.leg.wa.gov)?
No. The definition of a “producer of title insurance business” as defined in RCW 48.29.010(3) (www.apps.leg.wa.gov) specifically includes real estate agents and brokers. Any licensed real estate agent or broker may be in a position to influence the selection of a title company, even if he or she chooses to limit some or all of his or her business activities to short sale negotiations.
12. Can a title company create and own a membership website for local producers and the title company to provide an easy way for members to refer business to each other?
No. This is prohibited. The website and service contitutes giving something of value to someone in a position to refer or influence the referral of title insurance business. In addition, it constitues advertising on behalf of, for, or with a producer. See RCW 48.29.210(2) (www.apps.leg.wa.gov) and WAC 284-29-215(2) (www.apps.leg.wa.gov) for details.
1. I work for or represent a title company and I was invited to golf with some clients. My principal or employer will cover my greens fees, but won’t pay for the real estate agents. May I go?
2. A real estate training company is putting on a seminar for about 150 to 200 local attendees. They've asked local businesses, including a local title company's office, to hand out free tickets to local mortgage and real estate companies. Is this allowed under the title rules?
No. Title companies cannot provide non-title services to real estate agents without charging for those services. Providing free tickets to real estate agents by leaving them on a title company's counter is also not allowed under the rules. Also, using title company employees to hand out tickets violates the rules. See WAC 284-29-255(1) (www.apps.leg.wa.gov) for details.
3. I am a representative or employee of a title company. Under the new rules, may I be a member of a networking group that includes business owners, producers, and representatives or employees of a title company?
Yes. This is allowed in the rules. See WAC 284-29-255(4) (www.apps.leg.wa.gov) for details.
4. I work for a title company. I'm currently serving on an association committee for producers of title insurance business. The association meets once a month, usually at a restaurant. However, we will hold our next meeting at a location where members have been asked to bring a dish. May I participate in the potluck meeting?
Yes, a title company employee may attend activities and business meetings of producers under the conditions outlined in the rules. See WAC 284-29-255(4) (www.apps.leg.wa.gov) for details.
5. Our title company is having a retirement party at a local country club for a longtime employee. We plan to serve hors d’oeuvre with beer and wine. May we invite some producers who have known and worked with the retiree for many years?
No. There are no exceptions to the rules for giving a thing of value to a producer for this type of gathering. WAC 284-29-230(3) (www.apps.leg.wa.gov) defines “meal” to include receptions and cocktail parties. WAC 284-29-230(1)(b) (www.apps.leg.wa.gov) defines that a business meal on behalf of anyone must include a substantial and substantive title insurance business discussion directly before, during, or after the business meal. It’s unlikely that this type of discussion would occur at a retirement party. Even if the title company considers the party a “self-promotional” function under WAC 284-29-205(11) (www.apps.leg.wa.gov) rather than a business meal, the function would have to be open to all producers and be held at the title company’s usual place of business under WAC 284-29-230(5)(a) (www.apps.leg.wa.gov).
6. If invited to a lender's function, can a title company attend and advertise its services?
Yes, but only if the title company is attending and advising about its services. It cannot sponsor or pay for, or subsidize the function in any manner. See WAC 284-29-260(1)(a), (2) (www.apps.leg.wa.gov) for details.
1. I work for or represent a title company and I often go out to businesses to make presentations about various products we offer. Can I make a charitable donation in a real estate office's name in return for the opportunity to make such a presentation? The real estate office wouldn’t be required to buy the product.
No. This is strictly prohibited. The contribution is being made indirectly in exchange for the referral of title insurance business. See WAC 284-29-250(2)(b) and 284-29-205(13) (www.apps.leg.wa.gov) for details.
2. Can title company staff attend a producer luncheon for the benefit of a charity and bid on auction items if he or she makes the check payable directly to the charity?
Yes. This is specifically allowed in the rules. See WAC 284-29-250(2)(a) (www.apps.leg.wa.gov) for details.
3. May a title company co-sponsor a charitable fund-raising event with a producer?
No. A title company may only make a contribution directly to the charity, not sponsor a charitable fundraising event. See WAC 284-29-250(2) (www.apps.leg.wa.gov) for details. Also, a title company cannot co-advertise with a producer in any manner whatsoever. See WAC 284-29-215 (www.apps.leg.wa.gov) for details.
4. Before the new title insurance rules were in effect, my title company founded, organized, and hosted an annual fundraiser for a charitable foundation, which our local county association of realtors ran. We would like to continue to coordinate this event. We would organize and pay for all expenses for the event and then get reimbursed when the event is over. Can we still do this?
No. WAC 284-29-250 (www.apps.leg.wa.gov) permits a title company to contribute to a charity only if the contribution it makes is "payable directly to the charity," and it does not make the contribution, directly or indirectly, in exchange for the referral of title business. Title company employees may, however, attend and volunteer their time at events hosted by charities. The purchasing, arrangement and securing of goods and services for this event is not the same as contributing funds directly to, and only to, the foundation itself. The intent of this rule is to limit charitable contributions to monetary contributions rather than in-kind donations.
1. A company that is owned by a title company provides Web-based software to help real estate agents or brokers with title transactions. Each transaction provides a credit to the real estate agent or broker, and gets subtracted from the amount payable by the real estate agent or broker each month. Is this allowed?
No. Title companies cannot directly or indirectly give anything of value to someone who's in a position to refer or influence the referral of title business to title companies. This applies to any third-party software vendor, whether part of the title company's system or outside of that system. See WAC 284-29-200(6) and 284-29-260(14) (www.apps.leg.wa.gov) for details.
2. May a title company discount escrow fees for loans such as Department of Veterans Affairs (VA) loans?
No. Title companies cannot discount fees to provide a more favorable fee to the lender or broker than the published rates. See RCW 48.29.210(2) , WAC 284-29-200(6), and 284-29-260(15) (www.apps.leg.wa.gov) for details.
3. May a title insurer or agent pay a portion of the premium to another title insurer or agent in exchange for the referral of title insurance business?
No. But a split of the premium is allowed according to the agency agreement between the agent and the title insurer by which the agent is appointed.
Under Washington state law RCW 48.29.210(1) (www.apps.leg.wa.gov), title companies may not pay fees for business referrals. Washington state law prohibits payment of these fees, even though the federal Real Estate Settlement Procedures Act (RESPA) may allow paying fees if the referring title company actually performs a service.
4. As a real estate advertising company, may we set up a non-licensed entity that helps unrepresented property sellers get title and escrow services from licensed title companies for a fee or commission?
No. Title companies may not give anything of value as a reward for referring title business. See RCW 48.29.210(1) (www.apps.leg.wa.gov) for details.
5. May a title company pay a referral fee to someone for referring business to the title company?
No. Title companies are prohibited from paying a referral fee to anyone, whether it is called a referral fee, tracking fee, or anything else. See WAC 284-29-260(14) (www.apps.leg.wa.gov) for details.
6. If a title company gives a discount to a developer/builder for his or her half of the escrow fee, must the title company also discount the other party's (buyer's) escrow fee?
Title companies must charge escrow fees according to the escrow fee schedule filed with the Insurance Commissioner and comply with WAC 284-29-260(15) (www.apps.leg.wa.gov). The escrow fee split must comply with the terms of the earnest-money agreement. Also, depending upon the circumstances, if the title company does not give the same discount to the buyer, the title company may be violating RCW 48.29.155(1) and (2) (www.apps.leg.wa.gov).
7. Often the portion of the escrow fees a title company charges a builder who is selling a new home are extremely low, while the amount it charges the consumer who is buying the home is half of the standard closing fee - significantly more than what it charged the builder. Is this fee reduction for builders prohibited?
Title companies must charge escrow fees according to the escrow fee schedule filed with the Insurance Commissioner and comply with the rules. See WAC 284-29-260(15) (www.apps.leg.wa.gov) for details.
8. May a title company give a small thank-you gift to a borrower, buyer or seller?
No, a title company must not give anything of value to anyone as a reward for referring business or creating title insurance business for a title company. See RCW 48.29.210(2) (www.apps.leg.wa.gov) for details.
9. A lender is using a third-party vendor that service providers, including title companies, must use in order for the title company to obtain title insurance business from the lender. To use this service, the title company must pay an activation fee and a per-order fee to the vendor. Is this allowed?
No. Payment of a per-transaction fee to a producer is not allowed. See WAC 284-29-260(14) (www.apps.leg.wa.gov) for details.
10. A producer developed a special “clock hour” class. He proposes to have a title company get the class approved by the Department of Licensing for continuing education. He then plans to teach the class under the title company’s name. All fees collected from the class would be paid to the producer. Is this permitted?
No. The time and expense to put on the class is a thing of value to the producer. For that reason, the title company is prohibited from sponsoring his class. See RCW 48.29.210(2) (www.apps.leg.wa.gov) for details
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.apps.leg.wa.gov) for details.
2. May a title company provide real estate agents or brokers comparable or demographic information in a listing package if the title company charges them for the information? If the cost to the title company to compile the data is less than $10, may the information be provided without charge?
The title company may only provide comparable or demographic information, as well as Exhibit A legal descriptions and parcel numbers, to real estate agents or brokers for a fee that covers the actual cost to compile and provide the information - even if the cost is less than $10. See WAC 284-29-210(5) (www.apps.leg.wa.gov) for details.
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.apps.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.apps.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.apps.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.apps.leg.wa.gov) for details.