Guideline: ALTA Homeowner's Policy of Title Insurance Revised 02/03/10

Explanation:

The ALTA Homeowner's Policy of Title Insurance Revised 02/03/10 provides more coverage to owners than the 2006 ALTA Owner's Policy. It incorporates many of the new Covered Risks of the 2006 ALTA Owner’s Policy and also includes the Covered Risks in the prior 2003 ALTA Homeowner’s Policy. The ALTA Homeowner's Policy contains 32 insuring clauses (Covered Risks). Version 02/03/10 expands the Continuation of Coverage provision and includes a creditors’ rights exclusion that is consistent with the Covered Risks. Covered Risks (Insuring clauses) and coverages in ALTA Homeowner’s Policy Revised 02/03/10 include:

1. Future Forgery and Future Ownership Claims: post policy forgery, impersonation, and adverse ownership coverage will protect the insured against loss if someone else claims to own the title.

2. Actual pedestrian and vehicular access based on a legal right.

3. Forced correction or removal of an existing violation of covenants, conditions or restrictions.

4. Loss of title because of a violation, before the insured acquired title, of covenants, conditions or restrictions.

5. Existing violations of subdivision laws or regulations, resulting in inability to obtain a building permit, requiring correction or removal of the violation, or refusal to perform a contract to buy, lease or make a mortgage loan. This Covered Risk is subject to a Deductible Amount and Maximum Dollar Limit of Liability.

6. Forced removal or remedy of an existing structure (other than a boundary wall or fence) because any part of the structure was built without obtaining a proper building permit. This Covered Risk is subject to a Deductible Amount and Maximum Dollar Limit of Liability.

7. Forced removal or remedy of existing structures (other than a boundary wall or fence) because they violate an existing zoning law or zoning regulation. Forced remedy (but not forced removal) is subject to a Deductible Amount and Maximum Dollar Limit of Liability.

8. Encroachments of: (a) existing structures onto a neighbor's land; (b) neighbor's existing structures onto the Land; (c) existing structures onto an Easement or over a building set-back line; or, (d) neighbor's structures (other than boundary walls or fences) onto the Land after Policy Date. The Covered Risk as to encroachment of existing structures onto a neighbor’s land is subject to a Deductible Amount and Maximum Dollar Limit of Liability.

9. Damage to existing structures because of use or maintenance of any Easement.

10. Damage to existing or future improvements because of the future use of the surface of the land to extract or develop minerals, water, or other substances.

11. Supplemental taxes for any period before Policy Date because of construction or change of ownership or use that occurred before Policy Date.

12. The residence with the address shown in Schedule A is not located on the land at Policy Date.

13. The map, if any, attached to the Policy does not show the correct location of the land according to the Public Records.

14. Gap Coverage as to matters recorded before the insured's Deed (in the Definitions of the Conditions).

15. Continuation of Coverage for (a) a spouse of the insured receives title because of dissolution of marriage; (b) the Trustee to whom the insured conveys; or, (c) the beneficiaries of the insured's trust upon death of the insured.

16. Stated substitute residence rental expenses and expenses of relocation, if the insured cannot use the Land.

17. Automatic Increased Coverage of up to 150% of Policy Amount over 5 years.

18. 10% increase in insurance coverage, if Company attempts pursuant to the policy to establish title and is unsuccessful

19. Coverage that real estate taxes and assessments are not due and payable, but unpaid.

20. Covered Risks insuring against notices of governmental enforcement, notices of legal violation and notices of eminent domain proceedings that are recorded in the Public Records.

21. There is (and has been) no co-insurance or apportionment clause in the Homeowner’s Policy.

22. The Policy clarify the arbitration clause. The rules for arbitration will be the ALTA Title Insurance Arbitration Rules (which incorporate the National Arbitration Forum rules except as modified). You may find the Title Insurance Arbitration Rules at www.alta.org/standards/arbitration1.1.06.cfm

The Homeowner’s Policy of Title Insurance (1/1/08) generally will have a premium charge of 110% of the applicable cost of the Standard Owner’s Policy (unless a higher rate is filed in your state).

Underwriting Requirements:

Our requirements for issuance of the ALTA Homeowner's Policy: 

1. Issue only on single family residence or residential condominium (not manufactured housing).
2. Issue only if improved. Verify by review of tax/assessment search. If search does not reflect improvements, inspect the property.
3. Issue only on bona fide sale, not existing ownership by insured.
4. The subdivision should be a platted subdivision, that (a) is established or (b) is being developed by a known reputable developer or builder.
5. Issue only on (a) a platted lot or (b) condominium unit. Do not issue on metes and bounds or other property without underwriter approval or unless you can determine that the metes and bounds description does not violate subdivision map requirements.
6. If builder sale or new construction, verify either that (a) builder is known in community as residential builder or contractor, or (b) certificate of occupancy or local equivalent has been issued, or (c) utilities are now available to the land.
7. Verify by tax/assessment search that the land includes the single family residence with address to be shown in Schedule A. If tax/assessment search does not reflect an existing residence, inspect or otherwise verify. Compare address in tax/assessment search to address shown in contract, if available. Do not show zip code on Schedule A.
8. Verify with homeowners association that assessments are paid current, that there are no known restriction violations (if the association has this information), and that any right of first refusal will not be exercised in current transaction (if there is a right of first refusal).
9. Verify no pending or current construction ongoing.
10. Verify that all bills paid on any prior construction within lien period.
11. If map of land attached (not required on policy), verify that description is same as Schedule A description.
12. Require seller to execute Homeowner's Policy affidavit and your customary affidavit of debts and liens, provided that it is not customary in your community to waive this affidavit.
13. Verify by review of restrictions/covenants that the land may be used as a residence.
14. Except as provided above, no survey or inspection is required.
15. Policy may be dated and issued on date of settlement if your requirements have been met, funds disbursed, and you are in position to promptly record. You may show date of settlement as date of policy and you do not need to show recording information in Schedule A.
16. Do your normal search.
17. Use our Schedule A with its preprinted Deductibles and Caps, or add those numbers to the Schedule A if you print your own Schedule A.
18. The ALTA does not establish deductible amounts and maximum dollar limits of liability.  Stewart Title Guaranty Company's deductible amounts and maximum dollar limits of liability are as follows:

Schedule A

***Deductible Amounts and Maximum Dollar Limits of Liability For Covered Risk 16, 18, 19, and 21: