Bulletin: SLS2017003

Dear Associates:

EXTRAHAZARDOUS RISK

Insuring transactions involving Indian / Native American / Native Band lands is an Extrahazardous Risk. 

If you are requested to insure a transaction of any size involving Indian Land, you must secure approval from a Stewart Title Guaranty Company Senior Underwriter or other underwriter specifically authorized to underwrite Indian Land transactions.

"Indian land" is an inclusive term describing  (1) all lands held in trust by the United States for individual Indians or tribes, (2) all lands, titles to which are held by individual Indians or tribes, subject to Federal restrictions against alienation or encumbrance, and (3) all lands which are subject to the rights of use, occupancy and/or benefit of certain tribes. Indian land also includes land for which the title is held in fee status by Indian tribes, and U.S. Government-owned land under Bureau jurisdiction. 25 CFR 150.2 (h).

RULES ON INDIAN LAND LEASES

1. Unless another law applies, an Indian Land Lease may not exceed 25 years, plus one renewal not to exceed 25 years, for public, religious, educational, recreational, residential, or business purposes. 25 USC 415(a). The lease must be approved by the Indian tribe and the Bureau of Indian Affairs (on behalf of the Secretary of Interior) (the BIA).

2. Leases by specifically named tribes that are listed in 25 USC 415(a) may not exceed 99 years.

3. HEARTH (Helping Expedite and Advance Responsible Tribal Home Ownership) Leases may be made solely by a tribe, if the lease is executed under tribal regulations approved by the BIA (examples of which are on the BIA website), and shall not require approval of the lease by the BIA. The Hearth Lease shall not exceed (1) 75 years if the lease is for public, religious, educational, recreational, or residential purposes, or (2) 25 years, and an option to renew for up to two additional terms not to exceed 25 years each if business or agricultural lease (except a lease for exploration, development, or extraction of any mineral resource) (BIA states that business uses may include shopping malls, outlets, grocery stores, restaurants, office space, hotels, and resort development). The regulations of the tribe may provide shorter terms and may have more restrictive purposes. 25 USC 415(h); BIA Website (HEARTH Act of 2012).

4. Special laws govern transactions by some tribes in Alaska, Arizona, Oklahoma (Five Civilized Tribes), California, Nevada, New Mexico, and Washington, including the Tulalip Tribes, Hopi Tribe, and Navajo Nation. For example, see 25 USC 415.

5. Grazing, farming, and other agricultural leases generally cannot exceed 10 years, absent substantial investment in improvements for farming. We do not insure grazing, farming, and agricultural leases.

6. A wind energy evaluation lease (WEEL) is a short-term lease that authorizes possession of Indian land to install, operate, and maintain instrumentation, and associated infrastructure such as meteorological towers to evaluate wind resources for electricity generation. 25 CFR 162.501. A WEEL may be for an initial term no longer than three years and one renewal not to exceed three years. 25 CFR 162.512.

7. A wind and solar resource (WSR) lease is a lease that authorizes possession of Indian land to install, operate, and maintain instrumentation facilities, and associated infrastructure, such as wind turbines and solar panels, to harness wind or solar energy to generate and supply electricity. Leases for biomass or waste-to-energy purposes are governed by separate regulation. 25 CFR 162.501, 162.538. A WSR may be for an initial term not to exceed 25 years and one renewal not to exceed 25 years unless a Federal statute provides for a longer maximum term. 25 CFR 162.540.

UNDERWRITING ISSUES

We must review written documentation establishing the authority of the BIA representative  to approve the lease for the term specified, including any extension (renewal) term. If the BIA representative approves a lease in excess of her delegated authority or in excess of the maximum term allowed by law, the lease may be void. In several cases, the BIA has declared a lease invalid because the original lease term or the renewal term exceeded the delegated authority of the BIA representative. See discussion in Commonwealth Land Title Ins. Co. v. OMG Americas, Inc., 2012 U.S. Dist. LEXIS 147538 (D.Utah Oct. 12, 2012).

We must review applicable documents of the tribe, including constitution, codes or laws, ordinances, regulations (such as HEARTH regulations), and resolutions to determine the authority of the tribal representative to approve the lease. As an example, Fannie Mae has made available a Model Ordinance for Mortgaging of Trust or Restricted Land.

We must be satisfied that any mortgage of a lease is authorized by the lease.

We should review any Memorandum of Understanding (MOU) for the benefit of a Designated Lender, such as a MOU with Fannie Mae. The MOU with Fannie Mae will require that the mortgage be recorded in the appropriate Bureau of Indian Affairs Area Land Titles and Records Office, the county recorder’s office in the state in which the mortgaged properties are located, and the recording office established under Tribal law that are designated by the Tribe for recording of mortgages and that the Tribe adopt appropriate Legal Standards. The Tribe and Fannie Mae will consent to the jurisdiction of a particular court (which may be limited to a particular Tribal court).

The Division of Land Titles and Records (DLTR), and its 16 Land Titles and Records Offices (LTRO), are the official Federal offices-of-record for all documents affecting title to Indian lands. If the Indian land is located on one of the Indian reservations listed on the BIA website that have tribally managed LTRO, the applicable records are the Tribal LTRO instead of the region's LTRO.

The BIA must grant a right-of-way across tribal land, and the Tribe also must consent to the right-of-way. 25 CFR 169.107, 169.123.

BULLETINS  REMINDER AND VIRTUAL UNDERWRITER

Please also note the following Bulletins and other material:

Related Bulletins:

SLS2015013 - UNDERWRITING - Indian Lands - Insuring Access in Reliance on Roads that Traverse Native American/Indian Lands 

SLS2014012 - UNDERWRITING - Indian Lands, The HEARTH ACT, which allows federally recognized tribes to opt out of approval by the Secretary of Interior for a lease, if the lease complies with the regulations adopted by the tribe and approved by BIA.

SLS2014011 - UNDERWRITING - Indian Lands - Review and Update, which notes that any challenge to a taking of land into trust by the Secretary of Interior must occur within six years of either the date of the Secretary’s decision or the recording of the conveyance to the U.S. as trustee, whichever is later.  We must review delegation memos that trace the delegation of authority from the Secretary of Interior to the BIA representative. A waiver of sovereign immunity must be properly authorized by the tribe.

SLS2014002 - UNDERWRITING - Extrahazardous Risks, which include insuring transactions involving Indian/Native American/Native Band lands. 

SLS00180 - Native Americans/Indians: Title Insurance, Leasehold Loans, etc. - UPDATE, which requires documentation that the tribe is a federally recognized Indian tribal entity, applicable organizational documents of tribe, documentation establishing applicable real property laws such as foreclosure laws, a limited waiver of sovereign immunity on a commercial transaction,  confirmation that the Tribe does not prohibit title insurers from doing business or regulate title insurance, customary search and examination of title, current BIA Title Status Report (TSR), mortgage and lease approval by tribe and BIA, recordation in BIA records, county land records if lender requires, and in tribal records, if any.

NL000106 - Native American/Indian Land - Policy Transaction Codes 

Underwriting Manual:

9.08 Indian Titles

Exceptions Manual: 

NAA Native Americans NAAR01 et seq.

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