Section 381.400

Title XXIV BUSINESS AND FINANCIAL INSTITUTIONS

Chapter 381

Effective - 28 Aug 1993   

  381.400.  Definitions. — 1.  As used in this section and sections 381.403 and 381.405, the following terms mean:

  (1)  "Construction completion guaranty", an agreement wherein a person guarantees or warrants that the improvements which are the subject of the guaranty will be completed or that the funds deposited under the guaranty are sufficient to complete such improvements;

  (2)  "Construction deposit guaranty", an agreement wherein a person agrees to accept funds from a mortgage lender, owner or purchaser of real estate or agrees to assure the proper application of funds already paid to a third party to pay for the cost of construction of improvements on such real estate, for disbursement to parties furnishing labor or material for the construction of such improvement and wherein the person guarantees to the party depositing the funds against loss from misapplication of the funds or inability to obtain a refund of the funds when such party is entitled to a refund thereof;

  (3)  "Construction escrow agreement", an agreement wherein a person agrees to accept from a mortgage lender, owner or purchaser of real estate funds to pay for the cost of construction of improvements on such real estate, for disbursement to the owner, general contractor, or parties furnishing labor or material for the construction of such improvement, but which does not contain any guarantee to the party depositing the funds against loss from misapplication of the funds or inability to obtain a refund of the funds.  The issuance of title insurance against mechanics' liens does not constitute a construction deposit guaranty or construction completion guaranty;

  (4)  "Insured closing letter", a statement issued by a title insurance company to a party to a real estate transaction, acknowledging that the title insurance agency or agent closing a transaction in connection with which the title insurance company's policy is being issued, is a duly licensed and authorized agency or agent of the title insurance company, that the performance of settlement services by such agency or agent is within the scope of its authority as agency or agent for the title insurance company, and promising to be responsible for the misapplication of funds or documents by the agency or agent or its failure to follow written instructions in connection with the closing;

  (5)  "Licensee", a title insurance company organized under the laws of this state or operating under a certificate of authority in this state, or a title insurance agency or agent licensed by the director.

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(L. 1993 S.B. 18 § 381.143 subsec. 1)