OPINION — Utah consumers want the freedom to choose. That is what Senate Bill 121 is all about. It repeals the law that grants a monopoly to one class of title and settlement agents. Senate Bill 121, which recently passed the House and Senate by comfortable margins, allows consumers the choice of one-stop shopping in real estate services.
Read more: Legislature passes bill allowing business-controlled title companies
Unfortunately, narrow interests working to protect their monopoly fear the competition that will be created by greater consumer choice. However, Utahns deserve a choice when it comes to buying and selling their homes.
Both the Utah Association of Realtors and the Utah Land Title Association, which represent over 80 percent of the title companies in Utah, worked together in creating a consensus bill that would both create competition and protect consumers. Consumers in Colorado, New Mexico, Nevada, Idaho, and more than 40 other states have this choice, and upon the governor signing the legislation of SB 121, Utahns will have this choice as well.
In the most recent Harris Survey on one-stop shopping and affiliated business arrangements in real estate transactions, with virtually all prospective buyers surveyed, 97 percent believe one-stop shopping makes buying a home easier.
The independent survey work on one-stop shopping began more than a decade ago. It has consistently shown greater public awareness and desire to have the choice of one-stop shopping for real estate services.
Opponents of this bill fear competition and what the effect of that competition will have on their bottom line. They have been spreading falsehoods about SB 121.
Here is the truth.
SB 121 adopts the federal Real Estate Settlement Procedures Act (RESPA) rules for affiliated businesses, which permits one-stop shopping. It requires that those who own an affiliate can only receive a proportionate return on any profit the affiliate earns. They cannot pay for referrals or pay kickbacks. They cannot require the use of the affiliate. That is illegal. They also must promptly disclose the affiliate relationship, putting the power back in the hands of the customer by allowing them to decide for themselves.
In addition, the Utah law requires any new title company to fund and maintain a capital reserve cushion to ensure the strength of the company. This provides stronger protections for Utah consumers than existed previously.
The new law also codifies a multipart test to determine the health and legality of the affiliate arrangements and provides penalties for violations. All of these rules make the affiliate relationship stronger and better regulated than most or all of its competitors.
SB 121 does not leave the consumer unprotected. The change in law is instead all about choice, as there cannot be a required use of any title company. If the governor approves the bill, consumers will have a choice, and there will be real competition for the first time in a long time. This leads to a stronger industry, better consumer options and increased savings that will be passed on to the customer. SB 121 is all about offering greater choice and increasing efficiency in the home purchase transaction.
Submitted by MATT GREEN, Keller Williams Utah regional director and operating principal of KW St. George Keller Williams Realty.
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Letters to the Editor are not the product of St. George News, its editors, staff or news contributors. The matters stated and opinions given are the responsibility of the person submitting them. They do not reflect the product or opinion of St. George News and are given only light edit for technical style and formatting.