Guideline: ALTA Homeowner's Policy of Title Insurance (7-1-21)

The ALTA Homeowner's Policy of Title Insurance (7-1-21) provides more coverage to owners than the 2021 ALTA Owner's Policy. It incorporates many of the Covered Risks of the 2021 ALTA Owner's Policy and also includes the Covered Risks in the prior 2006 ALTA Homeowner's Policy. The ALTA Homeowner's Policy (7-1-21) contains 33 insuring clauses (Covered Risks) and additional exclusions. You should use the most recent version of the ALTA Homeowner's Policy that is available in your jurisdiction.

Coverage Statement

The ALTA Homeowner's Policy of Title Insurance (7-1-21) covers improved land with an existing one to four family residence.  Each named Insured under Item 1 of Schedule A must be a Natural Person or Estate Planning Entity as defined in the Policy. Deductible Amounts and Maximum Dollar Limits of Liability apply to Covered Risk 16, 18, 19, and 21. 

Covered Risks:

Covered Risks (Insuring clauses) and coverages in the ALTA Homeowner's Policy (7-1-21) include:

• 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.
• Lack of actual pedestrian and vehicular access based on a legal right.
• Forced correction or removal of a violation existing at the Date of Policy of covenants, conditions or restrictions.
• Loss of title because of a violation, before the insured acquired title, of covenants, conditions or restrictions.
• Existing violations of State or Municipal 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.
• 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.
• 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.
• 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.
• Damage to existing structures because of use or maintenance of any Easement.
• Damage to existing or future improvements because of the future use of the surface of the land to extract or develop oil, gas, minerals, groundwater, or other substances.
• Supplemental taxes assessed by a State or Municipal taxing authority for any period before Date of Policy because of construction or change of ownership or use that occurred before the Date of Policy.
• The residence with the Property Address shown in Schedule A is not located on the Land at the Date of Policy.
• The map, if any, attached to the Policy does not show the correct location of the land according to the Public Records.
• Gap Coverage as to any defect in or lien or encumbrance on Title created, attached or recorded in the Public Record before the recording of the vesting instrument.
• Coverage that real estate taxes and assessments are not due and payable, but unpaid.
• Violations or enforcement by a government authority relating to the occupancy, character, subdivision, environmental remediation or protection and government forfeiture identified in an Enforcement Notice as defined in the Policy.

Other Considerations:

• Definition of Insured includes Estate Planning Entity.
• Definition of Public Records is as follows:  The recording or filing system established under State statutes in effect at the Date of Policy under which a document must be recorded or filed to impart constructive notice of matters relating to the Title to a purchaser for value without Knowledge. The term “Public Records” does not include any other recording or filing system, including any pertaining to environmental remediation or protection, planning, permitting, zoning, licensing, building, health, public safety, or national security matters.
• Stated substitute residence rental expenses and expenses of relocation, if the insured   cannot use the Land.
• Automatic Increased Coverage of up to 150% of Amount of Insurance over 5 years.
• 15% increase in insurance coverage, if Company attempts pursuant to the policy to establish title and is unsuccessful There is no co-insurance or apportionment clause in the Homeowner's Policy.
• Arbitration Clause mirrors 2021 Owner’s Policy arbitration clause.
• There are different versions of the policy which may have different arbitration and class action clauses and may differ in other aspects, depending on the State.
• Condition 6 provides for loss calculation and limits liability to claims based in contract under the Policy.     
• The Homeowner's Policy of Title Insurance 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. Each Insured in Item 1, Schedule A must be a “Natural Person” or “Estate Planning Entity” as defined in the Policy.
4. Issue only on bona fide sale.  This Policy should not be issued to an existing owner or owner in possession.
5. The subdivision should be a platted subdivision, which is  (a) is established; or (b) being developed by a known reputable developer or builder.
6. 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.
7. If sale is new construction or from a builder.  verify (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.
8. Verify by tax/assessment search 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.
9. Verify with homeowners’ association (a) assessments are paid current; and (b)there are no known restriction violations (if the association has this information); and (c) any right of first refusal will not be exercised in current transaction (if there is a right of first refusal).
10. Verify no pending or current construction ongoing.
11. Verify all bills on any prior construction within lien period have been paid in full
12. If map of land attached (not required on policy), verify that description is same as Schedule A description.
13. Require seller to execute STG Homeowner's Affidavit and your customary affidavit of debts and liens(provided that it is not customary in your community to waive this affidavit.)
14. Verify by review of restrictions/covenants the land may be used as a residence.
15. Except as provided above, no survey or inspection is required.
16. 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.
17. Perform search in accord with standard search guidelines within your jurisdiction.
18. Where available, the STG Gold Endorsement to 2021 ALTA Homeowner’s Policy should be issued with the ALTA Homeowner's Policy.
19. 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.
20. 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:
21.  

Schedule A

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

Special Insuring Provision:

In Oklahoma you must include the following exception in Schedule B, Part II of each Commitment in which the ALTA Homeowner's Policy of Title Insurance will be issued:

Covered Risk 25 of the Homeowner's Policy will be deleted.

You must add the following in Schedule B of each ALTA Homeowner's Policy of Title Insurance to be issued:

Covered Risk 25 is hereby deleted.