Final Publication of ALTA Forms, Including Commitment for Title Insurance Revision

August 11, 2016

The ALTA Board of Governors approved recommendations to adopt new and revised forms during a meeting on June 9, 2016. These forms have passed through the comment period and are now published in final with an effective date of Aug. 1, 2016.

New forms include ALTA Endorsement 18.2-06 Multiple Tax Parcel, ALTA Endorsement 23.1-06 Co-Insurance – Multiple Policies, a revised ALTA Commitment for Title Insurance, and the decertification of ALTA Expanded Coverage Residential Loan Policy and ALTA Short Form Expanded Coverage Residential Loan Policy.

Visit www.alta.org/forms to download the final forms. Note, in particular, that comments were accepted and have been applied to the ALTA Commitment for Title Insurance. The Forms Committee has also approved a number of technical corrections that will be posted in the coming weeks.

If you have comments or concerns, email Kelly Romeo, ALTA’s staff liaison for the Forms Committee, at kromeo@alta.org.

ALTA Endorsement 18.2-06 Multiple Tax Parcel – New Form

The existing ALTA Endorsement 18.1-06 (Multiple Tax Parcel) insures that (1) the identified tracts of land are assessed for real estate taxes under the listed tax identification numbers and do not include additional land, and (2) the easements, if any, described in Schedule A will not be cut off or disturbed by nonpayment of real estate taxes, assessments, or other charges on the servient estate by a governmental authority. However, in many transactions, the second coverage concerning easements is not applicable, because (1) there are no insured easements, (2) state law does not provide for priority of the easements over ad valorem taxes applicable to the servient estates, or (3) taxes are not paid through the year that the easements are recorded.

The new ALTA Endorsement 18.2 (Multiple Tax Parcel) removes the insurance regarding priority of easements over taxes applicable to the servient estate. Companies may continue to issue either Endorsement 18.1-06 or 18.2-06 on transactions involving multiple tracts based on company underwriting requirements.

ALTA Endorsement 23.1-06 Co-Insurance – Multiple Policies – New Form

The existing ALTA 23-06 Co-Insurance Endorsement is available for issuance if two or more co-insurers assume liability under one title insurance policy issued by the “Issuing Co-Insurer.”  The ALTA 12-06 and 12.1-06 Aggregation Endorsements are also available for issuance if the title insurer aggregated liability under multiple policies that it issued on different tracts of land. However, the existing Co-Insurance Endorsement did not contemplate the apportionment of liability by a co-insurer if multiple title insurance policies are being issued on separate tracts of land.

The new Endorsement 23.1-06 (Co-Insurance – Multiple Policies), which can be issued with either Owner’s or Loan Policies, refers in paragraph 2 to the separate Aggregation Endorsement of the Co-Insurer and acknowledges that each Co-Insurer’s policy liability is aggregated with the liability of the Issuing Co-Insurer (the lead title insurer actually issuing the policy) if the Co-Insurer issues its own Aggregation Endorsement showing that Co-Insurer’s policy liability and Aggregate Amount of Insurance.

ALTA Commitment for Title Insurance – Revised Form

This product updates and consolidates the two 2006 versions of the ALTA Commitment forms:  the ALTA Commitment Form (Adopted 6-17-06) and the ALTA Plain Language Commitment Form (Adopted 6-17-06).

While those two forms are similar in substance, there are variations between them.  Most importantly, the Committee recognized court decisions holding title insurers and agents liable for negligence or negligent misrepresentation in the preparation of title insurance commitments.  The Forms Committee approached this particular issue by including a bold-face “Notice” at the top of the form and incorporating it into the Condition 3(a). The Notice specifically precludes third party liability and underscores that the procedures utilized to determine the insurability of the title are proprietary to the Company and create no liability to any person outside the terms of the Commitment. A Company may continue to separately provide abstract or search reports if it chooses.

In the revised Commitment, the Committee

  • clarified, in Condition 4.(a), the insurer’s right to amend the commitment for matters appearing in the public records at commitment date that are not included as a requirement or an exception;
  • clarified, in Condition 5 – Limitations of Liability, the extent of the insurer’s liability for amending the commitment as permitted under Condition 4.(a) (which may encourage courts to uphold the limitations contained in the Notice);
  • incorporated the “gap” exception into the Conditions (Condition 4.(b)), as well as the option to include it in Schedule B, Part II ; and
  • underscored the contractual nature of the business relationship with the Proposed Insured by requiring both a named Proposed Insured and a specified dollar amount of coverage.

The Committee also took the opportunity to

  • streamline the document, including revising headings and reordering and restating certain Conditions;
  • add some definitions of terms included in the ALTA 2006 Owner’s and Loan policy forms for consistency;
  • revise Schedule B, Part II to incorporate language usually added to exceptions for covenants and restrictions denying publication of an unlawful discriminatory matter;
  • add, in the introductory paragraph to Schedule B, Part II, an exception for the terms and provisions of any lease or easement set forth in Schedule A as an estate or interest to be insured;
  • add Subsection 6.(d) of the Conditions, stating that the deletion or modification of a Schedule B, Part II Exception does not create an obligation to provide coverage beyond the terms of the Commitment or policy;
  • add Section 7 of the Conditions  indicating that, if the Commitment is issued by an agent, the agent’s role is limited to the issuance of title insurance commitments and policies and the issuing agent is not the agent of the insurer for the purpose of providing closing or settlement services;
  • add Section 8 of the Conditions indicating that, if a “proforma” policy is provided to a proposed insured, it does not reflect the status of title at the time that it is delivered and does not constitute a commitment to insure; and
  • add an optional section preceding Schedule A to identify basic reference details of the transaction for which the Commitment is issued.  Subsection 5.(f) of the Conditions states that the insurer has no liability for the content of this data.

Other changes to the form result in an updated, better-integrated document with clearer provisions and address issues relating to the delivery system (Transaction identification data, agent’s role, ALTA Universal ID, proforma policies). Returning to a single form of Commitment adds clarity for customers and helps avoid potential confusion in court interpretation of the insurer’s obligations under the contract.

Decertification of two existing commitment forms is scheduled for Dec. 31, 2017:

  • ALTA Commitment Form (6-17-06)
  • ALTA Plain Language Commitment Form (6-17-06)

Forms To Be Decertified Effective 08-01-2016:

  • ALTA Expanded Coverage Residential Loan Policy (12-02-2013) and
  • ALTA Short Form Expanded Coverage Residential Loan Policy (04-02-2014)

The ALTA Board previously adopted the Expanded Coverage Residential Loan Policy (12-02-13) and ALTA Short Form Expanded Coverage Residential Loan Policy (04-02-2014). These 2013 and 2014 policies insured the priority of the Insured Mortgage over condominium and property owners’ assessment liens and did not offer the flexibility to differentiate coverage if state law or covenants established priority of the assessment liens for future assessments, in whole or in part.

The Board subsequently approved forms in 2015 which have effectively replaced the forms being proposed for decertification. Those forms are:

  • ALTA Expanded Coverage Residential Loan Policy – Assessments Priority (04-02-2015)
  • ALTA Short Form Expanded Coverage Residential Loan Policy – Assessments Priority (04-02-2015)
  • ALTA Expanded Coverage Residential Loan Policy – Current Assessments (04-02-2015)
  • ALTA Short Form Expanded Coverage Residential Loan Policy – Current Assessments (04-02-2015)

These subsequently approved forms provide alternatives for coverage with respect to assessment liens based on the actual provisions of state law and terms of covenants. The ALTA Expanded Coverage Residential Loan Policy – Assessments Priority (04-02-2015) insures the priority of the Insured Mortgage over assessment liens for future assessments, while the ALTA Expanded Coverage Residential Loan Policy – Current Assessments (04-02-2015) does not. Similarly, the Short Form versions of these policies provide analogous coverage.

Given the adoption and general acceptance of these forms, there is no continuing need for the Expanded Coverage Residential Loan Policy (12-02-13) and ALTA Short Form Expanded Coverage Residential Loan Policy (04-02-2014).

Decertification means that the forms no longer appear in the ALTA Policy Forms collection. An individual title insurance company may decide to adopt an ALTA Policy Form and may also decide whether or not to continue using a decertified form in the marketplace. The ALTA Policy Forms are made available for customer convenience and the parties are free to agree to different terms, including the continued use of decertified forms, unless otherwise required by law.

As always, the forms have been developed by the ALTA Forms Committee and approved by the ALTA Board. An opportunity to review and comment is extended to ALTA members, Policy Forms licensees and industry customers before final publication. The forms, in general, are made available for customer convenience. The parties are free in each case to agree to different terms, and the use of these forms is voluntary, unless required by law. After publication, use of the forms is restricted to ALTA licensees and ALTA members in good standing as of the date of use. Permission to reprint may be requested by contacting service@alta.org.  


Contact ALTA at 202-296-3671 or communications@alta.org.

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