House adopts compromise allowing affiliated title-brokerage relationships under federal RESPA rules

SALT LAKE CITY — The Utah House on March 12 passed a second-substitute to Senate Bill 121 that eases state restrictions on affiliated-business relationships between title companies and real estate brokerages while incorporating federal RESPA standards and additional state limits.

Representative Schultz, the floor sponsor, said the substitute allows owners to have both title and brokerage businesses provided they remain separate entities and that at least 30% of title-company business come from outside the affiliated group — a change negotiated with title-industry stakeholders. “The Utah Land Title Association is in supportive of this second substitute,” Schultz said on the floor, and he told the chamber the substitute resolved many industry concerns.

Floor questions clarified that the bill does not create a single one-stop company; two separate companies must still exist and federal RESPA rules would continue to apply. The 30% rule was described as an industry-requested safeguard to ensure outside business participation in title companies affiliated with brokerages.

Sponsors argued the change will increase competition in the title industry and benefit consumers. Some representatives said they had received many emails on the issue; sponsors emphasized negotiation and compromise produced the substitute. The House passed the second-substitute, with a recorded vote reported in the transcript.

The measure returns to the Senate for action. Implementation will require businesses and regulators to align practices with the substituted statutory language and federal RESPA requirements.