R592. Insurance, Title and Escrow Commission.R592-16. Escrow Settlement Closing Transactions.
R592-16-1. Authority.
This rule is promulgated by the Title and Escrow Commission pursuant to Subsection 31A-2-404(2).
R592-16-2. Purpose and Scope.
(1) The purpose of this rule is to identify certain escrow practices involving two or more back-to-back sales and purchases of the same parcel of real property where funds from the final purchaser are received by the initial seller despite having no contractual privity, which the Commission finds may violate Sections 31A-23a-406 and R592-6-4.
(2) This rule applies to:
(a) a title insurance company;
(b) an agency title insurance producer;
(c) an individual title insurance producer; and
(d) an employee, representative, or any other party working for or on behalf of a title insurance company, an agency title insurance producer, or an individual title insurance producer, whether as a full-time or part-time employee or as an independent contractor.
R592-16-3. Definitions.
Terms used in this rule are defined in Sections 31A-1-301 and 31A-2-402. Additional terms are defined as follows:
(1) "Land flip" means two or more escrows involving real property where the following or similar circumstances exist:
(a) A agrees to sell real property to B;
(b) B then agrees to sell the same real property to C; and
(c) B plans to buy from A and sell to C.
R592-16-4. Prohibited Escrow Involving a Land Flip.
A title insurance company, an agency title insurance producer, or an individual title insurance producer may not conduct escrow involving a land flip unless:
(1) each real estate transaction stands on its own; and
(2) the funds used in each transaction are separate and distinct from the funds used in a subsequent transaction.
R592-16-5. Severability.
If any provision of this rule, Rule R592-16, or its application to any person or situation is held invalid, such invalidity does not affect any other provision or application of this rule that can be given effect without the invalid provision or application. The remainder of this rule shall be given effect without the invalid provision or application.
KEY: escrow insurance flip
Date of Last Change: December 23, 2021
Notice of Continuation: November 25, 2024
Authorizing, and Implemented or Interpreted Law: 31A-2-404(2)
