Bulletin: PA2014003

Dear Associates: 

Stewart Title Guaranty Company has experienced significant claims because of outstanding rights to mineral and other substances that were not excepted in the title insurance policy.

These losses often have occurred because the search of title was not long enough to discover the severance of rights in mineral and other substances, or because the title insurance agent relied on a starter, such as a prior title insurance policy.

Company Policy:

Pennsylvania is unique in that we have two active types of mineral/subsurface substance interests within our borders. These are the coal interests and the Marcellus Shale Formation Area related oil and gas interests which, in both instances, primarily affect northern, central and western parts of the Commonwealth. We have addressed these interests in previous bulletins. These two bulletins: PA2012004 - PA Coal Rights Notices and PA2010010 - Oil and Gas Leases can be viewed at  http://vuwriter.com and will provide you with detailed guidance as to the proper exceptions to add to Schedule B of each Commitment, Binder, or Policy, other than a Short Form Loan Policy, in those counties where coal and/or oil and gas interests related to the Marcellus Shale Formation Area may appear. These exceptions may not be removed unless you secure Underwriter approval to remove or modify the exception. Deletion or modification of the required exception(s) generally will be based upon an extended search and examination required by the Underwriter and/or consideration of any state law reserving mineral or similar rights apart from patent reservations.

For coal counties, the following exception must appear:

"This document does not sell, convey, transfer, include or insure the title to the coal and right of support underneath the surface land described or referred to herein, and the owner or owners of such coal have the complete legal right to remove all of such coal and, in that connection, damage may result to the surface of the land and any house, building or other structure on or in such land. The inclusion of this notice does not enlarge, restrict or modify any legal rights or estates otherwise created, transferred, excepted or reserved by this instrument. Policy does not insure against subsidence.”

The following exception must be added to each Commitment, Binder, or Policy, other than a Short Form Loan Policy, for property located in counties within the Marcellus Shale Formation Area:

"Any lease, grant, exception or reservation of oil or gas rights, storage rights, or minerals or mineral rights appearing in the Public Records."

A starter may not be relied upon for the search and examination required to remove any of the above exceptions.

Lists of Coal Counties and counties within the Marcellus Shale Formation Area are included at the end of this Bulletin for your reference.

Always include in Schedule B any specific grant, reservation, or lease of minerals or other substances (such as caliche, gravel, rock, coal, lignite) that your search reflects. You should also add the following at the end of the specific exception (although the policy does not insure the title to any interest that is excepted): "The Company makes no representation as to the present ownership of any such interests. There may be leases, grants, exceptions or reservations of interests that are not listed."

If you have customarily included a patent and waters exception, you should continue to do so. A common patent exception is:  "(a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the Public Records.” If you remove any patent exception, you should review the patent and be satisfied that applicable state or federal law enabling the patents does not reserve any minerals or similar rights.

The foregoing policy does not affect the potential availability of endorsements that provide coverage for damage to buildings or improvements on the land resulting from the future exercise of any right to use the surface of the land for the extraction or development of minerals or any other subsurface substances, such as the ALTA 9-06 series and the ALTA 35-06 series, pursuant to applicable Guidelines.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter. 

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

COAL COUNTIES

Following is a breakdown of Pennsylvania counties according to weather and what type of coal has been found in them: