You're buying a brand-new home, and the builder's paperwork strongly nudges you toward their title company and lender. Do you have to go along with it? In Florida, the short answer is no — you have the right to choose your own title company for your owner's title insurance. Here's the law, how the incentives really work, and a new-construction trap most buyers miss: CDD bonds.
- No — you can choose your own title company for the owner's policy, even on new construction.
- RESPA bars a builder from requiring its title company; incentives are allowed, requirements aren't.
- New communities often have CDD bonds — an annual assessment on the tax bill; confirm the amount.
- An independent title company reviews permits and CDD/HOA obligations and works for you.
Your right to choose
Under RESPA Section 9 (a federal law), a seller — and that includes a homebuilder — cannot require you to purchase title insurance from a particular company as a condition of the sale. The penalty is real: a seller who violates it can be liable to the buyer for up to three times the title charges. So while a builder can recommend its title company, it cannot mandate it for your owner's policy.
How builder incentives work
Builders routinely dangle closing-cost credits or upgrades if you use their affiliated title company and preferred lender. That's perfectly legal — incentivizing is allowed; requiring is not. If the builder, lender, and title company are related, the builder must give you an Affiliated Business Arrangement (ABA) disclosure spelling out the relationship and that you're free to shop.
💡 Smart move: weigh the incentive against the value of independent representation. Sometimes the credit is worth it; sometimes the peace of mind of your own title company — working only for you — is worth more. You're allowed to compare.
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Why an independent title company protects you
On new construction, an independent closing agent does more than issue a policy. It runs a full title search, checks for open or expired building permits from fast-moving construction, reviews HOA and CDD obligations, and issues your owner's title insurance — all working for your interests, not the builder's timeline.
The CDD bond trap
Many new Florida communities sit inside a Community Development District (CDD). The CDD financed the roads, utilities, and amenities with bonds, and homeowners repay them through an annual assessment on the property tax bill — typically a debt-service (bond) portion plus an operations-and-maintenance portion. Two things to know:
- The CDD assessment can add hundreds or thousands per year on top of your regular taxes — confirm the exact amount before you buy.
- The bond portion can sometimes be paid off early; ask whether it has been, and what the payoff is.
These assessments also get prorated at closing — see how Florida tax proration works. Estimate your all-in numbers on the closing cost calculator.
The bottom line
Take the builder's incentive into account — but know it's your call. You can bring in your own title company for the owner's policy, get independent eyes on permits and CDD obligations, and still close on the builder's home. That's not being difficult; it's protecting the biggest purchase of your life.
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General information, not legal advice. RESPA and affiliated-business rules have specific requirements; confirm details for your transaction. CDD assessments vary widely by community — verify the current amount and any payoff with the district and your closing agent.
