Bulletin: PA2023001

Dear Associates:

The Title Rating Insurance Bureau of Pennsylvania (TIRBOP) recently adopted new/revised forms effective as of April 1, 2023. A list of the new/revised forms can be see below in the reference section.

The new forms and corresponding guidelines are available on Virtual Underwriter in the Pennsylvania Forms.

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

The following new or revised policies are adopted by ALTA, effective as of July 1, 2021, and effective in the Commonwealth of Pennsylvania as of April 1, 2023:

• 2021 ALTA Loan Policy of Title Insurance, as modified by TIRBOP
• 2021 ALTA Owner’s Policy of Title Insurance, as modified by TIRBOP
• 2021 ALTA Short-Form Residential Loan Policy – Current Assessments, as modified by TIRBOP
• 2021 ALTA Homeowners Policy of Title Insurance (For a One-to-Four Family Residence), as modified by TIRBOP
• 2021 ALTA Expanded Coverage Residential Loan Policy (For a One-to-Four Family Residence) – Current Assessments, as modified by TIRBOP
• 2021 ALTA Short Form Expanded Coverage Residential Loan Policy (For a One-to-Four Family Residence) – Current Assessments

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 PA 1620 (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 Mechanic's 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 endorsements are new endorsements in Pennsylvania, and are effective and may be issued as of April 1, 2023:

• PA 1231 (ALTA 18.3) – Single Tax Parcel and ID
• PA 1241 (ALTA 18.2) – Multiple Tax Parcels
• PA 1601 (ALTA 10.1) – Assignment and Date Down
• PA 1660 (ALTA 34.1) – Identified Exception & Identified Risk Coverage

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

The PA Endorsement 1661 (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 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.

The following Closing Protection Letter is effective in the Commonwealth of Pennsylvania as of April 1, 2023.

2023 TIRBOP Pennsylvania Seller Closing Protection Letter – Single Transaction

The following Closing Protection Letter has been withdrawn by Stewart Title Company effective in the Commonwealth of Pennsylvania  as of April 1, 2023.

TIRBOP Pennsylvania Seller Closing Protection Letter – Single Transaction adopted December 1, 2015, as revised December 1, 2018.

Decertification of the 2006 ALTA Forms is scheduled to occur, 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.

In addition to the adoption of the new forms, there was a change to the language of Sections 5.2 E and 5.3 E of the Pennsylvania Rate Manual related to the procedure for Postponement of an Owner’s Policy. The current language for Section 5.2 E reads as follows:

E.  POSTPONEMENT OF OWNER'S POLICY

When an owner acquires a premises and purchases title insurance and the owner does not grant a mortgage on the premises at the time of the acquisition, at the written request of the Insured Owner, the issuance of an owner's policy may be postponed for a period not to exceed 12 months after the date of recording the deed. If, during the 12 month period, the Insured Owner places a mortgage on the premises, no separate charge other than an additional Charge due for a loan policy in an amount in excess of the owner's policy, if any, shall be charged for the issuance of the owner's and loan policies. However, a work Charge for conducting the loan closing and issuance of an updated title Commitment, if required, may be made which shall not exceed 25% of the Sale Rate for such loan policy.  In no event shall the provisions of this Section apply beyond the 12 month period.

Effective April 1, 2023, Section 5.2 E will now read as follows

E.  INSURING MORTGAGE WITHIN 12 MONTHS OF DATE OF ACQUISITION

In a transaction involving the acquisition of real estate wherein an owner  purchases an owner’s policy on the date of acquisition, and no mortgage is to be simultaneously granted, no separate Charge shall be made for a loan policy issued by the same Insurer if the date of settlement of the insured mortgage is within 12 months of the date of acquisition of the premises, other than an additional Charge due for a loan policy as may be in excess of the Charge made for the owner’s policy, and any endorsements attached to the loan policy. The applicable rate for calculating the additional Charge for the loan policy, and any endorsements attached thereto, shall be the Sale Rate. However, a work Charge for conducting the loan closing and issuance of an updated title Commitment, if required, may be made which shall not exceed 25% of the Sale Rate for such loan policy. Notwithstanding a loan policy issued pursuant to this Section, the date of the owner’s policy shall be the date of the acquisition of the premises.  In no event shall the provisions of this Section apply beyond the above described 12 month period.

The primary change is the addition of the sentence “Notwithstanding a loan policy issued pursuant to this Section, the date of the owner’s policy shall be the date of the acquisition of the premises.” This means that when this procedure is used, the Owner’s Policy is not to be dated as of the date of the subsequently recorded mortgage, but as of the original date of acquisition of the property.

A similar sentence was added to the revised version of Section 5.3 E as well related to transactions under the Approved Attorney Procedure.

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.