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Title Insurance Guide
CLTA
POLICY: (Standard Coverage Policy)
This policy can be used to cover either owners or lenders insurance. It
is the standard policy of title insurance in California. Some of the
coverages provided are:
1.
All
record matters affecting title are shown in the Policy in order of their
priority.
2.
There
is access if the property abuts upon an open public, dedicated street.
3.
There
are no forgeries or failed conveyances in the chain of title.
4.
The
insured has a marketable interest in the real property.
DOES NOT COVER:
1.
Matters which a correct survey would show.
2.
Unrecorded matters.
3.
Matters which a physical inspection of the property would
disclose.
4.
Rights of parties in possession.
5.
Unpatented water and mineral rights.
6.
Matters known, created or assumed by the insured.
OWNERS INSURANCE:
Any commercial property, residential property which has more than four
units, vacant land, residential real property of less than four units
which is not in a tract or normal residential community or which has as
its primary use non-residential purposes (farming, grazing and the
like).
LENDERS INSURANCE:
All types of property normally of Second Deeds of Trust by individuals
and non-bank or Savings and Loan lenders.
ALTA
RESIDENTIAL OWNERS POLICY
Used only for residential real property of one to four units (if a
residential condominium project, use this policy regardless of the
number of units for individual unit sales). This policy, in addition to
the basic coverage provided by all title insurance policies protects the
insured against losses caused by:
1.
Mechanic Liens arising out of work done on the property to which the
insured did or did not agree to pay for.
2.
The
encroachment of improvements on the insured's property onto other
property.
3.
Taxes
and Assessments which are disclosed by public record, but not yet a
lien.
4.
Access.
5.
Zoning
Compliance (as long as property in question and zoning are both
residential).
6.
CC&R's
Compliance.
Insurer will insure a
seller carry back Deed of Trust under this policy by endorsement. This
is the only type of Deed of Trust that may be insured under this policy.
If Title Insurance is requested to issue this policy for vacant land or
real property which is not in a tract or normal residential community,
they may decline to issue it.
ALTA
LENDERS POLICY
For
institutional lenders only - Banks, Savings and Loans, Federally Insured
Loans, Insurance Companies and the like.
Insures the lender's
priority, and the fact that title is marketable covers both recorded
matters as well as unrecorded matters such as:
1.
Encroachments.
2.
Unrecorded Easements.
3.
Access.
4.
Loss of Priority.
5.
Unrecorded Liens and Encumbrances.
As you can see, the
coverage is quite broad. An inspection or a survey may be required.
This policy is issued
on all types of real property. The rate used is the same as that which
you would use for an owners policy (ALTA Residential or CLTA) depending
on the type of property being covered.
ALTA
OWNERS POLICY: (Extended Coverage)
Do not confuse this with an ALTA Residential Owners. This
is the broadest form of insurance given in California in addition to the
coverage given by a CLTA policy. It insures:
1.
Encroachments (not disclosed by the policy).
2.
Access.
3.
Rights
of parties in possession.
4.
Unrecorded liens and encumbrances.
5.
Taxes.
6.
Matters
which a corrected survey would show.
DOES NOT COVER
MATTERS KNOWN, CREATED OR ASSUMED BY THE INSURED.
As a result, when
this type of coverage is requested, additional requirements include:
1.
Correct survey.
2.
Occasionally a field inspection.
3.
A check with all utilities to make sure they have no unrecorded
easements.
4.
Copies of all leases and/or tenant lists.
Since these
requirements take time to complete, plan accordingly. Further,
exceptions found in the policy on all matters will be noted, so don't
necessarily expect a clean report.
While this type of
policy can be issued for all types or property, the rules for its
issuance never change.
Contact an Access Real Estate Professional Today for
a Consultation to Develop Your Home Selling Plan!
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