Monday, February 2, 2009

Overview of Standard Title Insurance Forms (part 2)

The 1970 Owner's Policy (Form A), which did not insure as to unmarketability, is no longer issued. The 1970 Owner's Policy (Form B), which insures as to unmarketability of title, and the 1970 Loan Policy replaced earlier versions and are still available in most states. These forms were revised in 1984 to modify the governmental regulation exclusion, by providing that the exclusion did not apply if a notice of defect, lien or encumbrance was recorded in the local real property records.

The most current ALTA forms are the ALTA Owner's Policy (10-17-92) and ALTA Loan Policy (10-17-92). These forms replaced the recent "1990" ALTA policies and narrowed the creditors' rights exclusion by substitution of the "New York"creditors' rights language. The earlier ''1987" policies contained no express creditor's rights exclusion. Effective October 3, 1991, the "pre 1990 policies" (e.g., 1970 policies and 1970 revised 1984 policies) are no longer official ALTA forms (except for the Residential Owner's Policy), although they remain widely available upon request.

The 1992 policies are available throughout most of the United States; they are issued in modified form in some states. In Arkansas, Florida, Kansas, Missouri, New Jersey, and South Dakota (and in Alabama a notice is required, and in Kentucky and some other locations, arbitration is not enforceable) the arbitration clause is modified or deleted to remove compulsory arbitration; in Florida the coinsurance clause in the Owner's Policy is deleted; and in Texas a number of changes are made (e.g., modified mechanic's lien insuring provision; insurance of good and indefeasible title instead of marketable title; definition of access; slightly modified claims, creditor's rights, and arbitration provisions).

The 1970 policies remain available in most jurisdictions, but are not available in Michigan, New Jersey, New Mexico, New York, Pennsylvania, and Texas.

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