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CVR MLS Guidance on BOI Administrative Letter on Split Settlements

Posted on February 7, 2022

Updated on 2/11/2022


See update from the Virginia REALTORS, released on 2/11/2022



Original CVR MLS Post - 2/7/2022


On Friday, February 4, 2022, the Bureau of Insurance (BOI) of the State Corporation Commission issued an Administrative Letter (2022-01) indicating that Virginia law prohibits “split settlements”.  This Administrative Letter (the “Letter”) is directed to title companies only and was apparently issued without consultation with or advance notice to real estate industry leaders, such as RAR/CVRMLS, VR and real estate settlement agents.  Unfortunately, the Letter has caused confusion among our members and others in the real estate industry, so RAR/CVRMLS, VR and others are reaching out to BOI for clarification as we believe the Letter lacks the necessary specificity to provide appropriate procedures with respect to settlements.  But not all settlements are affected by this Letter.   The BOI only regulates non-attorney settlement agents and not attorneys, so attorney closings are unaffected by this Letter.  Until clarification is provided, below is guidance to our members to navigate through settlements.


  1. Settlements where buyers and sellers are represented by closing attorneys.  The BOI does not regulate attorneys, so this Letter does not affect settlements conducted by real estate closing attorneys.  Attorney closings should be unaffected.
  2. Settlements where buyer is represented by an attorney and seller is represented by a title company.  These closings should also be unaffected with respect to the buyer as the closing attorney is not regulated by the BOI.  The seller’s title company could be restrained in some of its activities regarding the closing, so the seller may be reliant on the buyer’s attorney for certain closing-related functions, such as obtaining a loan or judgement payoff. 
  3. Settlement where the buyer is represented by a title company and seller represented by a lawyer. These closings may be affected because the title company for the buyer is subject to this Letter and may issue temporary procedures to sellers on what settlement activities will be conducted by the title company.  These procedures may be inconsistent between title companies, as the Letter lacks specificity on settlement procedures.  Cooperation between the title companies and closing attorneys will be necessary.
  4. Settlement where the buyers and sellers are represented by title companies.  This is the type of settlement most affected by the Letter.  The buyer’s title company (who is acting as settlement agent) may issue specific settlement procedures affecting the seller and its settlement agent.  It is likely some confusion will arise as to the settlement activities performed by the buyer’s settlement agent.  An unanswered question in the Letter is whether fees can be charged by the buyer’s settlement company to the seller since the buyer’s settlement agent must conduct all settlement activities, including obtaining and disbursing a loan payoff on behalf of the seller.  Cooperation between title companies will be necessary.


In summary, attorney closings will be unaffected, but non-attorney closings conducted by title companies will be affected.  As soon as RAR/CVRMLS receives clarification regarding the Letter, we will update our guidance to you.  In the interim, patience and cooperation for non-attorney closings will be necessary as there will not likely be uniformity in settlement requirements between non-attorney settlement agents.

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  • 11-Feb-2022