A Licensee May Not Require a Buyer to Use a Specific Lender or Settlement Company as a Condition of Settlement - Real Estate Commission
The Real Estate Commission has received several complaints recently about salespersons who attempted to require a buyer to use a specific lender or settlement company. These complaints involved the sale of new homes as well as the sale of existing homes. Section 17-607 of the Maryland Real Estate Brokers Act states that, in a real estate transaction involving a single-family dwelling, a licensee may not require a buyer, as a condition of settlement, to employ a particular title insurance company, settlement company, escrow company, mortgage lender, or title lawyer. The only exception is that a seller may not be prohibited from offering owner financing as a condition of settlement. Violation of this provision of the law is a misdemeanor crime, and could lead to a fine not exceeding $5,000, imprisonment not exceeding one year, or both. Under Section 17-322(b)(29), these actions could also be the basis of a disciplinary action before the Commission which could result in the suspension or revocation of the license and/or a fine of up to $5,000.