(c) Any
person who is acting as or who is in the business of acting as agent,
representative, attorney, or employee of any of the persons described in (a) or
(b); provided, however, that this subdivision shall not be deemed to preclude
payment by a title insurer of normal commission to an agent, representative or
attorney of any of the persons described in the said subdivisions (a) or (b),
but who is not the employee of any such person, except that if any such person
entitled to receive and receiving commission hereunder stands in a fiduciary
relation to any of the persons described in subdivisions (a) or (b), he must
disclose in writing to such person the rate or amount of the commission to be
received; further provided, that the commission received from the insurer may
not be shared either directly or indirectly with any other person except a duly
licensed agent who is not in the employment or under the control of any of the
persons described in subdivisions (a) or (b) hereof.
(1) The rule is based, in part, upon
recognition of the fact that the agent, representative or attorney of the
purchaser or seller paying for the title insurance policy stands in a fiduciary
or quasi-fiduciary relationship with such purchaser or seller and that the
receipt by him of money or other economic benefit beyond that which such agent,
representative or attorney is entitled to as normal commission for services
rendered would be inconsistent with his fiduciary relationship in selecting the
title insurance for the purchaser or seller. Given a fair disclosure of the
rate or amount of such commission to such purchaser or seller, the payment of
reasonable agents' commissions is not inappropriate provided there is no
division of such commissions in a manner which constitutes a rebate or a
benefit to the lender. It is reasonable to assume that when there is no
possibility of an unearned and undisclosed material personal benefit or rebate
to the said agent, representative or attorney of the purchaser or seller, he
would either make no recommendation as to the title insurer or would recommend
a listing of title insurers known to be competitive in terms of price or
service in order to enhance his own business reputation and competitive
position.
(i) In connection with any such
disclosure in writing pursuant to paragraph (1) of this subsection, the agent,
representative or attorney shall inform the purchaser or seller in writing of
his right to choose the title insurer notwithstanding the recommendation of any
such agent, representative, or attorney. Such writing shall also fairly and
fully inform the purchaser of the limitations of the mortgagee-type title
insurance policy as regards protection of the owner's separate interest in the
property and shall inform him as respects the availability and cost of an
owner's-type policy from the title insurer. If the particular title insurer
represented by the said agent, representative or attorney does not provide
owner's-type coverage, the written disclosure must state that many insurers
provide both mortgagee-type policies and owner's-type policies.
(2) Any of the following
activities by a title insurer will be deemed to constitute an unlawful rebate
or inducement, but the listing of such activities is not to be construed as
exhaustive of such unlawful activities and it may not be inferred that an
omission from the listing constitutes a justification for engaging in a
particular practice which has not been specifically listed. The term "such
person" as used herein refers to any person described in subdivisions (a), (b),
or (c) of Section 2:
(A) Charging either more
or less than the scheduled rate for a policy of title insurance.
(B) Furnishing a preliminary title report,
printed copies of covenants, conditions, and restrictions, or plats, maps, and
like materials without charge to any such person. Any charge made for any such
reports or materials must have a reasonable relation to the cost of production
and the same shall be the same to all persons.
(C) Furnishing reports containing publicly
recorded information, appraisals, estimates of income production potential,
information kits or similar packages containing information about one or more
parcels of real property helpful to any such person without making a charge
that is commensurate with the actual cost of the work performed and the
material furnished.
(D) Delaying
the issuance of a policy beyond the close of escrow and crediting or deferring
the charge therefor in order to qualify a later transaction for a lower
rate.
(E) Providing, or offering to
provide, either directly or indirectly a "compensating balance" or deposit in a
lending institution either for the express or implied purpose of influencing
the extension of credit by such lending institution to any such person or for
the express or implied purpose of influencing the placement or channeling of
title insurance business by such lending institution.
(F) Paying for, or offering to pay for, the
fees or charges of an outside professional, such as an attorney, engineer,
appraiser, or surveyor, whose services are required or useful by any such
person to structure or complete a particular transaction.
(G) Paying for, or offering to pay for, the
salary or any part of the salary of an employee of any such person, or paying
for, or offering to pay for, the salary or any part of the salary of a relative
of any such person.
(H) Paying, or
offering to pay, any fee to any such person for making an inspection or
appraisal of property whether such fee bears a reasonable relationship to the
services performed or not.
(I)
Furnishing or offering to furnish, paying for or offering to pay for,
furniture, office supplies, telephones, equipment or automobiles to any such
person, or paying for, or offering to pay for, any portion of the cost of
renting, leasing, operating or maintaining any of the aforementioned
items.
(J) Paying for, furnishing,
or waiving, or offering to pay for, furnish, or waive, all or any part of the
rent for space occupied by any such person.
(K) Renting, or offering to rent, space from
any such person, regardless of the purpose, at a rent which is excessive when
compared with rents for comparable space in the geographic area, or paying, or
offering to pay, rent based in whole or in part on the volume of title
insurance business generated by any such person.
(L) Paying for, or offering to pay for,
entertainment, vacations, business trips, convention expenses, travel expenses,
membership fees, registration fees, lodging or meals on behalf of any such
person, directly or indirectly or supplying letters of credit, credit cards or
any such benefits to any such person for any purpose whatsoever.
(M) Paying for or furnishing, or offering to
pay for or furnish, any brochures, billboards, or advertisements appearing in
newspapers, on the radio, or on television, or other advertising or promotional
material published or distributed by or on behalf of any such person whether
used in connection with the promotion, sale, or encumbrance of real property or
not.
(N) Paying for or furnishing,
or offering to pay for or furnish, any business form to any such person other
than a form regularly used in the conduct of the title insurer's business and
furnished solely for its convenience in the conduct of its normal
business.
(O) Buying from or
selling to, or exchanging with, or offering to buy from, sell to, or exchange
with any such person, shares of stock in the title insurer or any business
concern controlling or controlled by or affiliated with the title insurer
except for purchases or exchanges made through a general public
offering.
