Bulletin: OR2018003

Dear Associates:

At its July 27, 2018, meeting, the Oregon Division of Financial Regulation approved the most recent filing application. The changes are technical corrections previously adopted by the American Land Title Association, affecting 16 endorsement forms and the 2016 commitment form. Below are the changes as incorporated into the OTIRO forms, which are based on the ALTA forms. A summary of changes, as provided by OLTA Chairman Cleve Abbe for ODFR’s review, follows:

(1) OTIRO Endorsement 203.2-06

ALTA Endorsement 3.2-06 (Zoning - Land under Development) Revised 04-02-2012 Technical Correction 10-18-2012, 12-01-2015

The correction to Section 3 changes “with any existing improvement” to “with any improvement.” The endorsement is intended for use with a planned improvement, so use of “existing” is not consistent with the endorsement’s circumstances and purpose.

(2) OTIRO Endorsement 204.1-06

ALTA Endorsement 4.1-06 (Condominium - Current Assessments) Adopted 06-17-2006, Revised 10-16-2008 Technical Correction 12-01-2016

The correction creates an optional place near the end to insert the date of the endorsement.

(3) OTIRO Endorsement 205.1-06

ALTA Endorsement 5.1-06 (Planned Unit Development - Current Assessments) Adopted 06-17-2006, Revised 10-16-2008 Technical Correction 12-01-2016, 12-01-2017

The correction changes “association of homeowners” in Section 2 to “association of owners.” Some planned communities include commercial properties whose owners are better captured by the change.

(4) OTIRO Endorsement 209.7-06

ALTA Endorsement 9.7-06 (Restrictions, Encroachments, Minerals - Land under Development - Loan Policy) Adopted 04-02-12 Technical Correction 08-01-16

The correction expands the list in Section 5.d. of excluded losses resulting from physical hazard. The change adds “flooding” to “contamination, explosion, fire, vibration, fracturing, earthquake or subsidence.” The addition of “flooding” is added not only in this endorsement but in six others – see Items 5, 12, 13, 14, 15 and 16 below. It is apparent that ALTA, by expressly excluding loss from the hazards identified in these endorsements, is making it clear that the endorsements are within the scope of “title insurance” and are not providing “property insurance.” The latter addresses loss from physical hazards. ORS 731.183. Title insurance, by contrast, addresses loss “by encumbrance, defective titles, invalidity or adverse claim to title.” ORS 731.190. As an example of this distinction, this endorsement (ALTA 9.7-06) provides coverage regarding any previously recorded notice of violation of an enforceable covenant relating to environmental protection, but only to the extent of the violation referred to in the recorded notice, and then only if there is no exception in Schedule B. The coverage, therefore, relates to omitting an exception for a recorded notice (a possible encumbrance) affecting the land title and thereby only to loss attributable to the omitted exception. An event of contamination is not covered, because that is a physical hazard, not an encumbrance on title. The addition of “flooding” to the other identified hazards simply brings the phrasing better in line with the distinction between property insurance and title insurance.

(5) OTIRO Endorsement 209.10-06

ALTA Endorsement 9.10-06 (Restrictions, Encroachments, Minerals - Current Violations - Loan Policy) Adopted 04-02-13 Technical Correction 08-01-16

One correction expands the list in Section 5.d. of excluded losses resulting from physical hazard. The change adds “flooding” and repositions “fracturing” into the current listing that reads “contamination, explosion, fire, fracturing, vibration, earthquake or subsidence.” A second correction affects Section 5.c. A second period is added to the reference to Section 3.d.

(6) OTIRO Endorsement 210.1-06

ALTA Endorsement 10.1-06 (Assignment and Date Down) Revised 02-03-10 Technical Correction 08-01-16

The correction adds a phrase of limitation to Section 2.b. to show that any coverage regarding taxes or assessment must be taxes or assessments “affecting the Title.”

(7) OTIRO Endorsement 215.2-06

ALTA Endorsement 15.2-06 (Nonimputation - Partial Equity Transfer) Adopted 6-17-06 Technical Correction 08-01-15

The correction inserts the article “the” before the word “entity,” as a grammatical improvement to the third paragraph.

(8) OTIRO Endorsement 218.1-06

ALTA Endorsement 18.1-06 (Multiple Tax Parcel - Easements) Adopted 06-17-2006 Technical Correction 12-01-2016

The correction creates an optional place near the end to insert the date of the endorsement.

(9) OTIRO Endorsement 228.3-06

ALTA Endorsement 28.3-06 (Encroachments - Boundaries and Easements - Land under Development) Adopted 04-02-2015 Technical Correction 12-01-2016

The corrections change the word “exclusions” in Section 1 to “exceptions” as a more appropriate word; change the word “exception” (with a lower case “e”) in Section 3(b) to “Exception” (with a capital “E”), because the reference is to matters in Policy Schedule B, the Schedule of Exceptions; change the header to remove the phrase “Described Improvements”; and create an optional place near the end to insert the date of the endorsement.

(10) OTIRO Endorsement 229.2-06

ALTA Endorsement 29.2-06 (Interest Rate Swap Endorsement - Direct Obligation - Defined Amount) Adopted 08-01-11 Technical Correction 04-02-14, 08-01-2016

The corrections change the word “Policy” (with a capital P) in Section 1 to “policy” (with a lower case “p”) as a grammatical improvement, and change the word “repayment” in Section 2 to “payment” as a grammatical improvement.

(11) OTIRO Endorsement 229.3-06

ALTA Endorsement 29.3-06 (Interest Rate Swap Endorsement - Additional Interest - Defined Amount) Adopted 08-01-11 Technical Correction 04-02-14, 08-01-2016

The corrections change the word “Policy” (with a capital P) in Section 1 to “policy” (with a lower case “p”) as a grammatical improvement; change the word “repayment” in Section 2 to “payment” as a grammatical improvement; and change the phrase “Swap Obligation” in Section 3.b. to “payment of Additional Interest” as a grammatical improvement on the use of the defined phrases “Swap Obligation” and “Additional Interest.”

(12) OTIRO Endorsement 235-06

ALTA Endorsement 35-06 (Minerals and Other Subsurface Substances - Buildings) Adopted 04-02-12 Technical Correction 08-01-16

The correction expands the list in Section 4.a. of excluded losses resulting from a physical hazard. The change adds “flooding” to “contamination, explosion, fire, vibration, fracturing, earthquake or subsidence.” 

(13) OTIRO Endorsement 235.1-06

ALTA Endorsement 35.1-06 (Minerals and Other Subsurface Substances - Improvements) Adopted 04-02-12 Technical Correction 08-01-16

The correction expands the list in Section 4.a. of excluded losses resulting from a physical hazard. The change adds “flooding” to “contamination, explosion, fire, vibration, fracturing, earthquake or subsidence.” 

(14) OTIRO Endorsement 235.2-06

ALTA Endorsement 35.2-06 (Minerals and Other Subsurface Substances - Described Improvements) Adopted 04-02-12 Technical Correction 08·01-16

The correction expands the list in Section 4.a. of excluded losses resulting from a physical hazard. The change adds “flooding” to “contamination, explosion, fire, vibration, fracturing, earthquake or subsidence.”

(15) OTIRO Endorsement 235.3-06

ALTA Endorsement 35.3-06 (Minerals and Other Subsurface Substances - Land under Development) Adopted 04-02-12 Technical Correction 08-01-16

The correction expands the list in Section 4.a. of excluded losses resulting from a physical hazard. The change adds “flooding” to “contamination, explosion, fire, vibration, fracturing, earthquake or subsidence.”

(16) OTIRO Endorsement 236.6-06

ALTA Endorsement 36.6-06 (Energy Project - Encroachments) Adopted 04-02-12 Technical Correction 08-01-16

The correction expands the list in Section 4 of excluded losses resulting from a physical hazard. The change adds “flooding” to “contamination, explosion, fire, vibration, fracturing, earthquake or subsidence.”

(17) OTIRO Commitment (Form C-03)

ALTA Commitment for Title Insurance Adopted 08-01-2016 Technical Corrections 04-02-2018

One correction affects the optional identification data at the top of Schedule A. This correction changes the phrase “ALTA Universal ID” to “Issuing Office’s ALTA Registry ID” as a better choice of words. The second correction affects Schedule A, Item 4. The correction changes the phrase “Title to the [_______________] estate or interest in the Land is at the Commitment Date vested in [insert vestee’s name]” to “The Title is, at the Commitment Date, vested in [insert vestee’s name].” The correction removes language that is redundant because “Title” is defined in the Commitment Conditions at Item1(h).

Agents please contact PropertyInfo Customer Care or your title production software vendor to get the new rates/forms changes implemented in your system. 

There is no need to wait, and any agents or directs ready to use the updated forms may do so as soon as their systems are updated with the new forms.

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

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