This update provides clarification and notification of title insurance policy types. Also in this update the State has gathered up the sections on title issues and moved them all to Section 6.
The Old REPC's section 10.1 has been moved to the New REPC Section 6:
Old REPC ----------------------------------------------------------------- :
10. SELLER WARRANTIES & REPRESENTATIONS.
10.1 Condition of Title. Seller represents that Seller has fee title to the Property and will convey good and marketable title to Buyer at Closing by general warranty deed. Buyer agrees, however, to accept title to the Property subject to the following matters of record: easements, deed restrictions, CC&R’s (meaning covenants, conditions and restrictions), and rights-of-way; and subject to the contents of the Commitment for Title Insurance as agreed to by Buyer under Section 8. Buyer also agrees to take the Property subject to existing leases affecting the Property and not expiring prior to Closing. Buyer agrees to be responsible for taxes, assessments, homeowners association dues, utilities, and other services provided to the Property after Closing. Except for any loan(s) specifically assumed by Buyer under Section 2.1(c), Seller will cause to be paid off by Closing all mortgages, trust deeds, judgments, mechanic's liens, tax liens and warrants. Seller will cause to be paid current by Closing all assessments and homeowners association dues.
New REPC ----------------------------------------------------------------- :
6. TITLE & TITLE INSURANCE.
6.1 Title to Property. Seller represents that Seller has fee title to the Property and will convey marketable title to the Property to Buyer at Closing by general warranty deed. Buyer does agree to accept title to the Property subject to the contents of the Commitment for Title Insurance (the “Commitment”) provided by Seller under Section 7, and as reviewed and approved by Buyer under Section 8. Buyer also agrees to accept title to the Property subject to any existing leases, rental and property management agreements affecting the Property not expiring prior to Closing which were provided to Buyer pursuant to Section 7(e). The provisions of this Section 6.1 shall survive Closing.
Further; Section 6.2 has been added to the New REPC:
6.2 Title Insurance. At Settlement, Seller agrees to pay for and cause to be issued in favor of Buyer, through the title insurance agency that issued the Commitment (the “Issuing Agent”), the most current version of the ALTA Homeowner’s Policy of Title Insurance (the “Homeowner’s Policy”). If the Homeowner’s Policy is not available through the Issuing Agent, Buyer and Seller further agree as follows: (a) Seller agrees to pay for the Homeowner’s Policy if available through any other title insurance agency selected by Buyer; (b) if the Homeowner’s Policy is not available either through the Issuing Agent or any other title insurance agency, then Seller agrees to pay for, and Buyer agrees to accept, the most current available version of an ALTA Owner’s Policy of Title Insurance (“Standard Coverage Owner’s Policy”) available through the Issuing Agent.
Discussion.
The title insurance policy referred to in the New REPC is the ALTA Homeowner's Policy. This policy provides coverage greater than the former ALTA Owners Policy.
The increased coverage premium is 10% more than the ALTA Owners Policy -- the Standard Coverage Policy in the old REPC, but offers protections for losses such as un-marketability of title, document recording failures (mortgages, liens, easements, and taxes and bankruptcies), unrecorded easements, mechanics liens, and incorrect surveys or survey problems.
'Amazing expanded protections for a hundred or so dollars. And this is one of the reasons the REPC was adjusted...to draw attention to the availability of the "better" policy for a very small increase in premium.
The verbiage in 6.2 provides for the ALTA Homeowners Policy to be the default choice...and to also allows the Buyer to request this expanded coverage if the initial insurance brought into the transaction by the title insurance company doesn't offer the expanded coverage policy. Further there is verbiage to handle cases where this expanded coverage ALTA Homeowners Policy is not available at all.
Below are excerpts of the actual forms.
Hold down your [Ctrl] control key and click on the image and it will open fully in a new browser window:
Old REPC Section 10.1
Old REPC Section 6.
New REPC. Section 6
--------- *** ---------- I’m remarking on the new REPC changes as I see them. This isn't legal advice.
Next up ...Section 7. Seller Disclosure
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Mike B. Class Star®
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