After 15 years, the American Land Title Association (ALTA) Board approved the revised 2021 ALTA Owner’s and Loan Policies in July of last year. The ALTA Forms Committee, which is made up of industry experts and includes some of First American’s brightest and most seasoned underwriters, was tasked with reviewing and revising the forms. The changes adopted by the ALTA Board of Governors reflect the final forms published on July 30, 2021.
So why did ALTA revise the 2006 and subsequent policies?
Suggestions on how to improve the 2006 forms started being submitted by customers and title industry members nearly the moment those forms were finalized. Fifteen years of experience with the 2006 forms crystalized years of comments into actionable ideas. Combined with the need to address recent judicial decisions and new legislation, the ALTA Committee felt it was time to implement changes. One example included the U.S. Supreme Court decision in McGirt vs. Oklahoma, which inspired ALTA and its First American Title members to focus on choice of law and jurisdictional issues. Also, enactment of Dodd-Frank (creating the CFPB) and the rapid adoption of remote online notarization, compelled the ALTA Committee to act.
What has changed in the forms?
ALTA created comparison charts that track the changes in the 2021 Owner’s Policy and the 2021 Loan Policy from the prior language of the 2006 policy forms. You may view the charts on the ALTA website. There are also changes to the following policies:
- ALTA Homeowner’s Policy of Title Insurance;
- ALTA Commitment for Title Insurance;
- ALTA Short Form Commitment for the Short Form Residential Loan Policy;
- ALTA Expanded Coverage Residential Loan Policy of Title Insurance — Assessments Priority;
- ALTA Expanded Coverage Residential Loan Policy of Title Insurance — Current Assessments;
- ALTA Short Form Expanded Coverage Residential Loan Policy — Assessments Priority;
- ALTA Short Form Expanded Coverage Residential Loan Policy — Current Assessments;
- ALTA Short Form Residential Loan Policy — Assessments Priority; and
- ALTA Short Form Residential Loan Policy — Current Assessments
Why are some terms in the new 2021 forms capitalized?
Words that are capitalized are “defined terms” in the policies. It is important to understand the defined term so that you understand the provision(s) in which the term is used. There are some new defined terms and some existing defined terms that have been revised. Examples of the existing defined terms that have been revised are: “Entity”; “Indebtedness”; “Insured”; “Land”; and “Public Records.” The new defined terms are: “Affiliate”; “Consumer Protection Law”; “Discriminatory Covenant”; “Enforcement Notice”; “Government Mortgage Agency or Instrumentality”; “Obligor”; “PACA/PSA Trust”; and “State”.
What changed in the definition of Public Records?
The base definition is substantively the same as it’s been for many years dating back to the 1987 ALTA policies. In the 2021 policies, a second sentence is added to the definition that provides examples of the types of records that are not within our contract definition of “Public Records.” The first sentence of the definition makes clear what we do intend as the “Public Records” whenever that term is used in our policy contract.
Are there any changes to the Covered Risks section?
Yes. The changes range from non-substantive wording changes to improved coverage, all intended to enhance our customer groups’ understanding of the scope of coverage provided in the new policies.
To learn more about the revised forms, join us for our CLE webinar series – New ALTA Forms: Changes to the ALTA Owners & Loan Policy on June 8.
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