- March 16, 1999
- All California Issuing Offices and Agents
- California Underwriting Guidelines for the CLTA Homeowners Policy
These guidelines are to be used in conjunction with the CLTA Homeowners Policy. This policy is to be issued only when specifically requested in writing by the prospective insured(s). These guidelines are in addition to the guidelines previously promulgated for use with the Stewart Title Guaranty "Gold" policy, a copy of which is attached as Exhibit A and which should be read before reading these guidelines.
1. This policy is limited to one-to-four unit residential properties or single condominium units only.
2. The policy is intended for use in "Lot, Block, Tract" subdivisions, or condominiums, with simple legal descriptions. If the property in question has any other form of legal description, approval must be obtained from underwriting counsel.
3. Inquiry must be made whether any addition or remodeling has been done on the property since its original construction. If any addition or remodeling has taken place, a determination must be made whether the work had been done pursuant to permit. This can be done either by obtaining a full set of the permits issued for the premises, and comparing them with the apparent work on the property, or by comparing the permits to the Transfer Disclosure Statement made by the seller as a part of the escrow. This will require a thorough study of the permits and the statement, and may justify an extra work charge.
4. If the legal description is a lot and block, we do not need to do any further underwriting regarding the Subdivision Map Act. If the description is other than a straight lot and block, the underwriting considerations will be the same as for the issuance of a 116.7 endorsement.
5. If mineral rights have reserved without waiving rights of surface entry in some manner, serious consideration should be given to deletion of the insurance against structural damage resulting from mineral extraction, especially in areas of mineral activity. The matter should be submitted to Stewart Title Guaranty underwriting personnel for consideration on a case-by-case basis.
6. The map attached to the policy should be a copy of the relevant portion of the tract map, or of a current survey if a survey is available. If the property in question is a metes and bounds parcel, the description must coincide precisely with a careful reading of whatever map is being used.
7. Because the CLTA Homeowners Policy is a form of extended coverage, the issue of mechanics liens must also be considered.
A. If the property is a new home, you will need to be sure that all potential lien claimants have released or waived their potential claims before or at closing.
B. If the property is not a new home, inspection or the Transfer Disclosure Statement regarding any work of improvement, remodeling or repair within the past 180 days must be obtained, and subjected to the same consideration as any other mechanic lien potential.
8. The other additional coverages of the CLTA Homeowners Policy (1998) are assumed risks.
We recommend that a copy of the Transfer Disclosure be obtained and kept in the title file.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.
CALIFORNIA GUIDELINES FOR ISSUANCE OF THE
"GOLD" COMPREHENSIVE POLICIES
(Owners and Loan Policies)
A. To be issued ONLY ON IMPROVED RESIDENTIAL ONE-TO-FOUR FAMILY RESIDENCES, AND FIRST LIENS BY INSTITUTIONAL LENDERS ONLY!
B. Policies must be limited to property that has been legally subdivided into individual or separate lots by either a subdivision map, a parcel map, or a condominium plan.
Note:Any requests to issue any of these policies on improved, but unsubdivided or metes and bounds description MUST BE submitted, together with a current ALTA "as-built" survey to STGC underwriting for approval. In review of the file for approval, the Company MAY agree to issue the Owners and/or delete one or more of the insuring provisions (such as insuring Provision No. 18 of the Mortgagee's policy).
C. AN INSPECTION MUST BE MADE ON ALL REQUESTS TO ISSUE EITHER OR BOTH POLICIES TO DETERMINE WHETHER OR NOT THERE HAS BEEN RECENT CONSTRUCTION, SINCE BOTH POLICIES GIVE AFFIRMATIVE MECHANIC'S LIEN PROTECTION AND/OR COVERAGE.
In addition, the inspection should note all apparent or visible easements, ANY encroachments and/or overlaps of improvements, etc.; furthermore, if there is apparent violation of CC&R's (i.e.- 3 story home, when in fact, the CC&R's provide for 1 story only), the inspection should reflect that the existing improvements are one, or two, or three story.
D. NEW OR RECENTLY COMPLETED RESIDENCES:
(i) When an order is received for a "new" or "recently" completed one-to-four family residence, in addition to mechanic's lien coverage referred to above, because of some of the additional coverages (such as valid building permit coverage), you MUST determine that the subject property has a "certificate of occupancy or the local equivalent";
(ii) Note: If your inspection reveals or discloses a recently completed or remodeling project or addition, remember, a Building Permit has to be obtained and/or issued for the addition.
E. Notwithstanding anything to the contrary herein, on ALL orders requesting either or both the "GOLD" policies in excess of $500,000.00, MUST HAVE an ALTA "as-built" survey, UNLESS waived by an authorized STGC Regional and/or Senior Underwriter.
F. FOR INFORMATION PURPOSES, SOME of the coverages (among other) that have previously been added by endorsement, but are now included in the Owners and/or Lenders policy, where applicable are ALTA Form 4 (CLTA 115.1) for Condominiums; ALTA Form 5 (CLTA 115.2) for Planned Unit Developments; ALTA Form 6 (CLTA 111.5), for Variable Rate Deed of Trust, and ALTA Form 9 (CLTA 100.2) (also see CLTA #100), and the CLTA Form 116 (Description of Improvements), etc., (attachment of maps is optional); all existing underwriting guidelines should also be considered.
G. AREAS WHEREIN THE LOAN POLICY SHOULD NOT BE ISSUED:
(i) any title defects
(iii) notices of environmental or restriction violations in the public records
(iv) lis pendens
- Bulletins Replaced:
- Related Bulletins:
- Underwriting Manual:
- 14.12 Owner's Policy
- Exceptions Manual: