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ALTA Releases New and Revised Title Insurance Forms
Practical Law Legal Update w-003-9066 (Approx. 4 pages)
ALTA Releases New and Revised Title Insurance Forms
by Practical Law Real Estate
| Published on 20 Oct 2016 • USA (National/Federal) |
The American Land Title Association (ALTA) recently released two new title endorsements and a revised form of title commitment with an effective date of August 8, 2016. The forms will be available in all but 11 states.
The American Land Title Association (ALTA) recently released two new title insurance endorsements and a revised title commitment form.
The new endorsements are ALTA Endorsement 18.2-06 (Multiple Tax Parcel) and ALTA Endorsement 23.1-06 (Co-Insurance- Multiple Policies).
The revised ALTA commitment for Title Insurance 08-01-2016 updates and consolidates the ALTA Commitment Form (6-17-06) and the ALTA Plain Language Commitment Form (6-17-06).
These new and revised forms are currently available only in Illinois, Iowa, Massachusetts, Mississippi, and Oklahoma. The forms will not be available in Delaware, Florida, Louisiana, New Mexico, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, and Texas. In the remaining states, mainly those that require form and rate filings, the forms will become available on a state-by-state basis as those filings are approved.
ALTA Endorsement 18.2-06 (Multiple Tax Parcel) 08-01-2016
This new endorsement is based on ALTA Endorsement 18.1-06 (Multiple Tax Parcel) and can be issued with an owner's or lender's title insurance policy.
This new endorsement insures against loss or damage if either:
- The parcels described in the endorsement are not assessed for real estate taxes under the listed tax identification numbers.
- The listed tax identification numbers include any additional land.
This new endorsement differs from the existing ALTA Endorsement 18.1-06 because that endorsement insures against loss or damage if easements included on Schedule A can be cut off by non-payment of real estate taxes or assessments imposed on the servient estate.
ALTA Endorsement 18.2-06 is useful because the additional coverage and expense of ALTA Endorsement 18.1-06 is not applicable if:
- There are no easements described on Schedule A.
- State law does not allow priority for easements over real estate taxes imposed on the servient estate.
ALTA Endorsement 23.1-06 (Co-Insurance- Multiple Policies) 08-01-2016
This new endorsement is based on ALTA Endorsement 23-06 (Co-insurance- Single Policy), which is used when two or more underwriters co-insure a single title policy.
ALTA Endorsement 23.1-06 should be used when multiple underwriters co-insure multiple title policies on different parcels of land. It is intended to be issued with ALTA Endorsement 12-06 (Aggregation- Loan) or ALTA Endorsement 12.1-06 (Aggregation- State Limits- Loan). This combination of endorsements ensures that each co-insurer's liability is aggregated with that of the co-insurer to the extent the co-insurer issues its own aggregation endorsement. Each co-insurer is liable for its percentage of liability of the total loss or damage under the co-insurance policy, but not for more than the amount stated in its aggregation endorsement.
Commitment for Title Insurance Adopted 6-17-06 Revised 08-01-2016
The revised ALTA Commitment for Title Insurance 08-01-2016 updates and consolidates:
- ALTA Commitment Form (6-17-06).
- ALTA Plain Language Commitment Form (6-17-06).
The key revisions of this updated form are:
- An initial notice that the commitment is only an offer to issue title insurance.
- A statement on the company's right to amend the commitment.
- Headings to improve readability.
- New definitions for improved consistency with other ALTA forms.
- A statement limiting the agency of the company's issuing agent.
- A new section stating that a pro-forma policy is not a commitment to insure nor an opinion on the state of title.
- An optional section to include transactional information.
- An introductory clause to Schedule B, Part II that says the policy does not insure against loss resulting from the terms of a lease or easement contained in Schedule A.
Practical Implications
These new and revised forms allow flexibility and cost-effectiveness for commercial real estate owners and lenders to acquire title insurance with endorsements that better suit their particular needs.
For more information on title insurance, see: