- August 25, 1995
- All Ohio Agents
- Standard survey exception in loan and owner's policies of title insurance
1. Loan Policies:
Since July 27, 1994, Stewart Title Guaranty Company ("STG") has not required a survey in order to give extended coverage as to survey matters in ALTA loan policies issued on 1-4 family residential properties and on commercial properties where the coverage amount was not in excess of $1,000,000. In its Bulletin 95-4 the Ohio Department of Insurance concludes that the no-survey requirement violates Chapter 3953 of the Revised Code. Therefore, with respect to applications for insurance received on or after September 1, 1995, you are required to obtain, in accordance with the Department's Bulletin, some "evidence of a survey" in order to give extended survey coverage. The "evidence of a survey" may consist of an old survey, a prior policy containing special exceptions obviously arising as the result of a survey, or a HUD-1 or other form of settlement statement disclosing that a form of survey had been obtained. STG is not concerned with the age of the "evidence of a survey". Where you are relying upon any form of "evidence of a survey", except a current survey or location service, you must obtain an affidavit of the seller/borrower stating, in effect, that no changes to the improvements located at the property have been made. Where changes to the improvements have been made, the affidavit should disclose the nature of the changes. If changes have been made, contact STG personnel for further guidance.
2. Owner's policies:
The Department's Bulletin requires the title insurer to waive the standard survey exception in the owner's policy where the insurer has waived the survey exception for the loan policy. The Department's Bulletin speaks in terms of the "standard survey exception". Therefore, where you are giving extended coverage in a loan policy and simultaneously issuing an owner's policy, you are to delete the standard survey exception from that owner's policy. However, you must also insert into Schedule B of that owner's policy the following special exception:
Encroachments, overlaps, boundary line disputes, easements not of record, or other matters which would be disclosed by an accurate survey or inspection of the premises.
This special exception may be deleted from the owner's policy upon receipt of an appropriate ALTA survey which discloses no facts requiring additional special exceptions.
If only an owner's policy is to be issued, the Department's Bulletin is inapplicable. Therefore, the standard exception for survey matters is not to be deleted unless an appropriate ALTA survey is obtained which discloses no facts requiring additional special exceptions.
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.