Explanation of
Title Policy Forms
by TitleWest
STANDARD COVERAGE v. EXTENDED COVERAGE:
ALTA policies can be issued
as standard coverage policies or as extended coverage policies. An extended
coverage policy insures the owner or the priority of the lien of the insured
mortgage against:
a)
unrecorded matters, and
b) documents recorded in the public records and not shown as exceptions to the
policy, which could constitute a lien, defect or encumbrance on the title.
A policy is considered an
extended coverage policy when it is issued without the "standard exceptions" in
Schedule B. By deleting the standard exceptions an extended coverage policy is
created. The policy provides coverage against possessory claims by adverse users
or squatters, encroachments and other off-record matters that a survey could
disclose. It also protects against easements or even mechanic's liens which may
exist.
When an ALTA policy includes
the standard exceptions, the policy becomes a standard coverage policy. The
standard policy excludes coverage for off-record matters. Off-record matters
include, among others, encroachments, unrecorded easements, discrepancies or
conflicts in boundary lines and interests of parties in possession of the land.
ALTA
OWNER'S POLICY
Insures an owner with respect to the title to the subject property. The policy
can be used for residential or commercial properties, or various other interests
in real estate. The coverage remains in effect as long as the insured, or heirs
or devisees of the insured, retain an interest in the subject property or remain
liable under warranties given in the sale of that property. The minimum amount
of coverage is generally the full purchase price of the real estate, including
any improvements to the property that constitute real property.
ALTA
LOAN POLICY
Insures a lender making a loan secured by a mortgage on land with respect to the
title of the subject property, and with respect tot the validity and priority of
the mortgage lien.
NEW!
EXPANDED COVERAGE ALTA LOAN POLICY
Includes the same insuring provisions as the ALTA Loan Policy with automatic
coverage for endorsements typically issued separately for ALTA Form 9
(restrictions); ALTA Form 6 and 6.2 (variable rate); ALTA Form 8.1
(environmental protection liens; and CLTA Form 116 (address); plus expanded or
additional coverage for certain off record or post-policy matters not previously
available on residential properties or available only by special endorsement
including automatic coverage for revolving credit loans and mortgage
modifications; usury law coverage; post-policy mechanic's lien coverage;
building permit violations; subdivision map act coverage; violation of
restrictive covenants; post-policy forgery; post-policy encroachment; structure
damage from mineral extraction; map inconsistencies; increasing policy coverage;
enhanced access; expanded survey coverage; and zoning. Some of these expanded
coverages contain limitations and provisions for deductibles.
ALTA
LEASEHOLD LOAN POLICY
Insures a lender making a loan secured by a mortgage on a "leasehold estate"
with respect to the title to the subject property, and with respect to the
validity and priority of the mortgage lien. The policy includes a definition of
the "leasehold estate" and provides a basis for valuation of the leasehold
estate for claims purposes. The policy specifies various miscellaneous items of
loss in the event of eviction that are peculiar to a "leasehold estate" --
including the reasonable cost of removing and relocating personal property up to
25 miles, rent or damages that may be due to someone with superior title, the
fair market value of any sublease under the insured leasehold, or damage that
the insured's borrower may be obligated to pay any sublessee because of any
breach of the sublease caused by eviction.
ALTA
LEASEHOLD OWNER'S POLICY
Insures the owner of the leasehold estate. Coverage is very similar to the ALTA
Owner's Policy but this policy provides a definition of a "leasehold estate" and
a method of valuation of the "leasehold estate" for claims purposes. Also, in
the event of eviction, it provides for miscellaneous items of loss as set forth
in the ALTA Leasehold Loan Policy.
ALTA
CONSTRUCTION LOAN POLICY
Insures a lender making a loan secured by a mortgage on land for the purpose of
financing construction on the land with respect to the title to the subject
property and with respect to the validity and priority of the mortgage lien.
This policy is similar to the ALTA Loan Policy except that no mechanic's lien
coverage is furnished by the base policy, but rather by one of four endorsement
forms designed to be used.
ALTA
RESIDENTIAL ("PLAIN LANGUAGE") TITLE INSURANCE POLICY
Insures the owner of a one-to-four family residential dwelling, residential lot,
or condominium unit. This is a "plain language" policy designed for consumers
and is often used, where appropriate, instead of the ALTA Owner's Policy. The
policy specifies 14 covered title risks and, unlike the ALTA Owner's Policy,
provides limited survey coverage and limited zoning coverage, if no exception is
taken to these matters.
NEW!
EXPANDED COVERAGE ALTA RESIDENTIAL ("PLAIN LANGUAGE" TITLE INSURANCE POLICY:
Includes the same insuring provisions as the ALTA Residential Policy with
automatic expanded or additional coverage for certain off record or post-policy
matters not previously available on residential properties or available only by
special endorsement. These coverages include building permit violations;
subdivision map act coverage; violations of restrictive covenants; post-policy
forgery; post-policy encroachment; structure damage from mineral extraction; map
inconsistencies; increasing policy coverage; and continuation of insurance to
the trustee of a trust who receives a deed from the homeowner. Some of these
expanded coverages contain limitations and provisions for deductibles.
ALTA
SHORT FORM RESIDENTIAL LOAN POLICY
Insures the lender making a mortgage loan on a one-to-four family residence or
condominium unit. The policy is an abbreviated short form version of the current
ALTA Loan Policy, which is designed to be delivered to the lender at closing.
The policy contains blanket exceptions to taxes, covenants and restrictions,
easements, reservations of minerals or mineral rights, and offers certain
affirmative assurances with respect to survey matters. The policy also includes
an Addendum, which can be used to set forth additional exceptions or to limit
the affirmative assurances. The policy is designed so that certain ALTA
endorsement forms may be specified, and thus incorporated, by checking
appropriate boxes.
ALTA
MASTER RESIDENTIAL LOAN POLICY
This form offers a lender, in one-to-four family residential and condominium
transactions, the protection of the current ALTA Loan Policy through the Master
Policy, which is supplemented by an ALTA Residential Loan Certificate for each
particular mortgage loan insured. The Residential Loan Certificate is similar to
the ALTA Short Form Policy and sets forth blanket exceptions to taxes, covenants
and restrictions, easements, reservation of minerals or mineral rights, which
are followed by certain affirmative assurances desired by lenders in connection
with these exceptions, including specified affirmative assurance with respect to
survey matters. As with the Short Form Policy, The Master Policy also includes
an Addendum. The Residential Loan Certificate is also designed so that it may
incorporate by reference certain ALTA endorsement forms.
ALTA
US POLICY
An owner's policy, very similar to the regular ALTA Owner's Policy, designed to
insure title in the United States of America or a US Agency. This policy has an
additional insuring provision insuring against loss or damage by reason of the
failure of the title report or commitment to name any party who has an interest
in the land, which was disclosed by the public records immediately prior to the
filing of the lis pendens or Declaration of Taking by the USA The policy does
not insure the validity or sufficiency of the condemnation proceeding, and it
contains a provision by which the Attorney General of the United States may
undertake the defense of any claim, provided that certain notices and
opportunities to suggest defenses are given to the company.
If you have a current or anticipated
real estate matter and would like to schedule a consultation with an attorney,
please
e-mail or call our office at (602) 678-2970.
