Bulletin: VT2021001

Dear Associates:

The American Land Title Association (ALTA) recently adopted new/revised forms effective as of November 5, 2021.

The new forms and corresponding guidelines are available on Virtual Underwriter in the New ALTA 2021 Forms Page. 

You can view webinars and PowerPoints regarding the new ALTA forms by accessing the Webinars and Power Points page on Virtual Underwriter.

The following new or revised policies are adopted by ALTA, effective as of July 1, 2021, and effective in Vermont as of November 5, 2021:

• 2021 ALTA Owner's Policy (without Arbitration)
• 2021 ALTA Loan Policy (without Arbitration)
• 2021 ALTA Homeowner's Policy of Title Insurance (without Arbitration)
• 2021 ALTA Short Form Residential Loan Policy - Assessments Priority
• 2021 ALTA Short Form Residential Loan Policy - Current Assessments
• 2021 ALTA Expanded Coverage Residential Loan Policy - Assessments Priority (without Arbitration)
• 2021 ALTA Expanded Coverage Residential Loan Policy - Current Assessments (without Arbitration)
• 2021 ALTA Short Form Expanded Coverage Residential Loan Policy - Assessments Priority
• 2021 ALTA Short Form Expanded Coverage Residential Loan Policy - Current Assessments (without Arbitration)

The notable changes and revisions in the 2021 ALTA Owner's Policy and the 2021 ALTA Loan Policy include the following:

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  • Use of new or amended defined terms such as Affiliate, Consumer Protection Law, Discriminatory Covenant, Enforcement Notice, Governmental Mortgage Agency or Instrumentality, Insured, Knowledge, Obligor, PACA-PSA Trust, Public Records, and State in the policies and revised endorsements (these terms made changes to some endorsements necessary).
  • Moving some exceptions that became commonplace (such as calculation of area, and PACA-PSA Trust) to the jacket as Exclusions.
  • Punctuation and grammatical refinements.
  • Clarification that choice of law will be the State, or to the extent it controls, federal law.
  • Clarification that the choice of forum will be a State court or a federal court.
  • Amendments based on how courts have treated the prior policy language.
  • New coverages and exclusions for both Insured and Insurer.
  • The ALTA 39 Policy Authentication (Electronic Policy/Signature) endorsement will become obsolete. The endorsement's coverages are now included in the Policy Jacket. However, if requested and the ALTA 39 is available in your state, you may issue upon request.
  • The 2021 ALTA Policies treat the PACA-PSA Trust both as a Covered Risk and an Exclusion. If there is a recorded PACA-PSA Trust Enforcement Notice (such as a lis pendens) and the policy does not except to that recorded notice, it is a Covered Risk. If it is a regular PACA-PSA Trust lien and not recorded in the Public Records, it is excluded.
  • A new definition of the term "Insured" will allow coverage under the 2021 ALTA Owner's Policy and the 2021 ALTA Loan Policy to continue when the Land is conveyed to an Affiliate, even when there is a monetary exchange.
  • "Enforcement Notice" is a new defined term. This is a document affecting the Title, recorded in the Public Records at the Date of Policy that describes any part of the Land and identifies a violation or enforcement of a law, ordinance, permit, or governmental regulation, exercise of a power, or enforcement of a PACA-PSA Trust.
  • Covered Risk 10 of the 2021 ALTA Loan Policy adds language to clarify and confirm for lenders that the coverage is for certain enumerated components of the Indebtedness.
  • Covered Risk 11.a. on Mechanics Liens (consistent with the ALTA 32 Series endorsements) confirms that the coverage relates to services and equipment, in addition to labor and materials.
  • Exclusion 9 of the 2021 ALTA Loan Policy and Exclusion 7 of the 2021 ALTA Owner's Policy exclude liability for the quantity of area, square footage, or acreage described in the Land (if any).
  • The Transaction Identification Data that has been a part of ALTA Commitments since 2016 is now formatted into Schedule A of the new 2021 ALTA Policies as well for consistency. It is made clear this information is not insured.
  • The 2021 ALTA Loan Policy adds a new option for the Insured to select the date the Insured Mortgage is extinguished for determination of value. The 2021 ALTA Owner's Policy adds a new option for the Insured to select the Date of Policy for determination of value if Title to all of the Land is void.

For a detailed list of differences between the 2021 and 2006 ALTA forms and a summary of the advantages to the customer of the new ALTA forms, click here.

The following new or revised Commitments are adopted by ALTA, effective as of July 1, 2021, and effective in Vermont as of November 5, 2021:

• 2021 ALTA Commitment for Title Insurance (without Arbitration)
• 2021 ALTA Short Form Commitment for Title Insurance

The following new or revised endorsements are adopted by ALTA, effective as of July 1, 2021, and effective in Vermont as of November 5, 2021, and may be issued with the 2021 ALTA Owner's Policy and the 2021 ALTA Loan Policy, if applicable:

The ALTA Endorsement 34.1 (Identified Exception and Identified Risk Coverage) (7-1-21) can be issued with either the 2006 or 2021 ALTA Policies.

The following ALTA 47 series endorsements (and Addendums for 2012 and 2015 ALTA Short Forms) were adopted by ALTA as of April 2, 2021, and are effective in Vermont as of November 5, 2021, and are issued only with the 2006 ALTA Owner’s Policy, the 2006 ALTA Loan Policy, the 2013 ALTA Homeowner’s Policy, and the 2015 ALTA Expanded Coverage Residential Loan Policies, and only if our Guidelines require issuance.

• ALTA 47 (Operative Law - 2006 Owner's Policy) (4-2-21)
• ALTA 47.1 (Operative Law - 2006 Loan Policy) (4-2-21)
• ALTA 47.2 (Operative Law - 2013 Homeowner's Policy) (4-2-21)
• ALTA 47.3 (Operative Law - 2015 Expanded Coverage Residential Loan Policy Current Assessment) (4-2-21)
• ALTA 47.3 (Operative Law - 2015 Expanded Coverage Residential Loan Policy Assessment Prior) (4-2-21)

The following ALTA Operative Law forms were adopted by Stewart Title Guaranty Company on April 2, 2021 and filing effective in Vermont as of November 5, 2021. 

• ALTA Operative Law 2012 Short Form Residential Loan Policy Addendum
• ALTA Operative Law 2015 Short Form Expanded Coverage Residential Loan Policy assessments priority addendum
• ALTA Operative Law 2015 Short Form Expanded Coverage Residential Loan Policy Current Assessments Addendum
• ALTA Operative Law 2015 Short Form Residential Loan Policy Current Violations Addendum

The following NON-ALTA endorsements were adopted by Stewart Title Guaranty Company on July 1, 2021, and are effective in Vermont as of November 5, 2021, and are to be issued only with the 2021 ALTA Owner’s Policy and the 2021 ALTA Loan Policy. 

• STG Class Action Deletion Endorsement

Separate bulletins will address these endorsements: 

• STG Deletion of PACA-PSA Exclusion
• STG 2021 Homeowner’s Endorsement
• STG Post Policy Forgery Endorsement with 2021 ALTA Owner’s Policy

The following Closing Protection Letters were adopted by Stewart Title Guaranty Company on September 1, 2021, and are effective in Vermont as of November 5, 2021.

2021 STG VT Closing Protection Letter Single Transaction Form (“VT1”)

2021 STG Modified Vermont 002-2008 ALTA CPL - Limitations

The 2006 versions of these endorsements must be issued with the 2006 ALTA Owner's Policy and the 2006 ALTA Loan Policy.

The following ALTA endorsements have not been revised and may be issued with the 2006 and the 2021 ALTA Policies, if applicable. 

Decertification of the 2006 ALTA Forms is scheduled for December 31, 2022, but the decertification will not prohibit use of the 2006 ALTA Forms. While we prefer to use the 2021 ALTA Forms if acceptable and available in the particular market, we will continue to make the 2006 ALTA Forms available if they are requested by your customers.

As a reminder, the most current version of the ALTA form available in each state for issuance with the applicable version of the ALTA Policy should be used, unless approved by a Stewart underwriter.

Please contact Property Info Customer Care at customercare@stewart.com or your title production software vendor to have the new forms uploaded to your system.

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.