An Article by Linda M. Green, Esq., Cleveland Commercial Manager, Chicago Title Insurance Co.
Effective on December 1, 2012, the ALTA 9 series of endorsements for both an owner's and loan policy have been completely redrafted. These new endorsements will no longer contain any mineral coverage or any encroachment coverage with the exception of the ALTA 9 Loan Policy endorsement which will continue to contain encroachment coverage. Mineral coverage will now be available in the ALTA 35 series of endorsements and encroachment coverage is available in the ALTA 28 series for encroachments over boundaries or onto easements.
The "ALTA 9 Restrictions, Encroachments, Minerals" is issued with a loan policy only and will cost 10 cents per thousand with a minimum fee of $150.00. This endorsement no longer gives coverage for "Private Rights", which were assurances that, unless expressly identified in Schedule B, any instrument containing covenants and restrictions does not also create any easement, lien for liquidated damages, private charges or assessments, options to purchase, rights of first refusal or require prior approval of a purchaser or occupant. That coverage is now available for a lender only by purchasing the ALTA 9.6 Private Rights endorsement which will cost 5 cents per thousand with a minimum fee of $150.00. The ALTA 9.6 endorsement does not provide coverage for easements.
The ALTA 9.1 Covenants, Conditions and Restrictions Endorsement for unimproved land is available for issuance with an owner's policy only and the ALTA 9.2 is the owner's policy endorsement for improved land. Both will cost 8 cents per thousand with a minimum fee of $150.00. These endorsements do not contain "Private Rights" coverage, mineral rights coverage or encroachment coverage. "Private Rights" coverage is no longer available for an owner.
The ALTA 9.3 Covenants, Conditions and Restrictions Endorsement is a loan policy endorsement similar to the ALTA 9 form except that is does not provide mineral coverage and therefore will cost only 8 cents per thousand with a minimum fee of $175.00. Note that the ALTA 9.4 and ALTA 9.5 have been withdrawn and are no longer available.
The last two ALTA 9 endorsements are the ALTA 9.7 Restrictions, Encroachments, Minerals endorsement for land under development that is issued with a loan policy. This endorsement is similar to the ALTA 9 form but also provides coverage for future improvements built in accordance with specific site and elevation plans. The cost for this endorsement is 10 cents per thousand with a minimum fee of $150.00. The ALTA 9.8 form is the owner's policy equivalent to the ALTA 9.7 and will cost 8 cents per thousand with a minimum fee of $150.00.
Mineral coverage for insurance policies is now available only through one of the ALTA 35 series of endorsements. The "ALTA 35 Minerals and other Subsurface Substances" is available for either an owner's or loan policy and provides coverage for enforced removal or alteration of a building, but not any other improvements, resulting from the future exercise of a right to use the surface of the land to extract minerals. The cost of this endorsement is 10% of the premium with a minimum fee of $250.00. The ALTA 35.1 can be issued with either an owner's or a loan policy and expands the definition of improvement to include structures and other man-made improvements such as paved parking and sidewalks. The ALTA 35.2 can be issued with either an owner's or loan policy and limits the definition of covered improvements to certain itemized improvements and also limits the coverage to a particular reservation by excluding the coverage for certain other itemized mineral reservations. Finally, the ALTA 35.3 form is a variation of the ALTA 35.1 to expand the definition of the covered improvements to address future improvements if built in accordance with specific site and elevation plans. The cost for the ALTA 35.1, 35.2 and 35.3 will be 15% of the premium with a minimum fee of $250.00.
If you have any questions regarding one of these endorsements you can contact Linda Green at: linda.green@ctt.com.
Chicago Title has been serving Ohio for over 50 years. Through their nationwide network, they provide title insurance, underwriting, escrow and closing services to every spectrum of the real estate industry. For more information, visit them at http://www.cticnow.com/.
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