December 2018

Statute Allows Pass Through for Remote Online Notary Fees

Earlier this year, the Texas Secretary of State’s office implemented rules for remote online notarization (RON), and the use of RON is now legal statewide.
It appears there will be transaction fees to use third-party remote online notaries and RON technology vendors. Therefore, this question has arisen: Who pays the per transaction fee?
Section 2501.008 of the Texas Insurance Code states that title agents can charge separate from the title insurance premium “Third-Party Charges” that are “incurred in connection with a closing and settlement.” Read TIC Section 2501.008:

    Sec. 2501.008.  THIRD-PARTY CHARGES.  A title insurance company, title insurance agent, or direct operation may charge, separate from the title insurance premium, actual costs or a reasonable estimate of costs incurred in connection with a closing and settlement, including:
    (1)  a charge by a third party for an electronic filing fee; or
    (2)  a fee of a third party for the provision of an ad valorem tax report.

In other words, this statute allows for the pass through of certain third-party charges. In 2009, during the 81st Legislative Session, the Legislature recognized that technologies would emerge to make transactions better for the consumer but would have potential costs associated with them. Section 2501.008 sought to encourage the use of these technologies while preserving the integrity of the title insurance premium rate base. Two charges were recognized as examples at that time, but the statutory language was intentionally broad to include technologies that would emerge in the future, such as these new remote online notary fees. 

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