1. (a) For purposes of this title, "closing the transaction" describes the investigation that is made:

   1. (1) on behalf of a title insurance company, title insurance agent, or direct operation before the title insurance policy is issued; and
   2. (2) to determine proper execution, acknowledgment, and delivery of all conveyances, mortgage papers, and other title instruments necessary to consummate a transaction.

2. (b) Closing the transaction includes a determination that:

   1. (1) all delinquent taxes have been paid;
   2. (2) in the case of an owner title insurance policy, all current taxes, based on the latest available information, have been properly prorated between the purchaser and seller;
   3. (3) the consideration has been passed;
   4. (4) all proceeds have been properly disbursed;
   5. (5) a final search of the title has been made; and
   6. (6) all necessary papers have been filed for record.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.