The new law shifts who controls the closing table – and puts new limits on sellers
Tennessee's governor has signed a law that strips sellers of the power to dictate who handles real property closings in the state.
House Bill 569 was signed into law on April 21, 2026, concluding a legislative process that began when the bill was filed for introduction on January 29, 2025. Sponsored by Representative Andrew Farmer, with a Senate companion – Senate Bill 394 – filed by Senator Rose, the legislation amends Title 56, Chapter 35 and Title 66 of the Tennessee Code Annotated.
At its core, the new law grants purchasers and borrowers in real property transactions the exclusive right to select the settlement agent handling the closing. That right is subject to approval by any mortgage lender, broker, or servicer involved in the transaction, but the selection itself now belongs squarely to the buyer's side of the table.
Once chosen, the settlement agent holds sole authority over the closing process. That includes handling escrow and closing services, acting as the issuing title insurance agency, performing the work needed to clear title, and producing or requiring any documentation necessary to complete the transaction. All functions must align with the underwriting rules and standards prescribed by the title insurance company the agent represents.
On the seller's side, the law draws firm lines. A seller in a Tennessee real property transaction cannot require a purchaser to use a particular settlement agent or condition any contractual obligation on that choice. These provisions cannot be waived or modified by any party to the transaction – no contract clause or negotiation can override the statute.
The law does preserve a seller's right to retain a licensed attorney for limited representation at closing. That representation covers deed preparation, fee negotiation, review and signing of closing documents, legal advice related to the escrow or closing process, and any actions required by the settlement agent for the seller to deliver clear and insurable title. The purchaser's selected settlement agent is also barred from collecting fees from a represented seller – or from its subsidiaries, affiliates, or subcontractors – without first obtaining written consent from the seller's attorney.
The bill cleared the House on March 30, 2026, by a vote of 86 to 2 after adopting an amendment during floor proceedings. The Senate followed on April 6, 2026, passing it 26 to 2. The bill text reviewed for this article is the original draft introduced in 2025; the legislation was amended during the House process prior to final passage.
For real estate professionals operating in Tennessee, the law represents a notable shift in closing dynamics. Listing agents will need to rethink how they counsel sellers on settlement arrangements, and buyer's agents should be ready to inform clients of their statutory right to choose a settlement provider. Anyone involved in drafting or negotiating purchase agreements in the state should take note: these are provisions no contract can undo.
