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Title Talk Newsletters
Rating Bureau Forms Adopted, Revised;Residential Owner’s Policy Withdrawn

 

The New Jersey Land Title Insurance Rating Bureau [“NJLTIRB’] has received the approval of the Commissioner of the Department of Banking and Insurance for revisions to the NJLTIRB Rate and Form Manuals, effective March 2, 2012.

 

·         ALTA End’t No. 13-06 (Leasehold – Owner’s)
·         ALTA End’t No. 13.1-06 (Leasehold – Loan)
·         ALTA End’t No. 14-06 (Future Advance – Priority)
·         ALTA End’t No. 14.1-06 (Future Advance – Knowledge)
·         ALTA End’t No. 14.2-06 (Future Advance – Letter of Credit)
·         ALTA End’t No. 14.3-06 (Future Advance – Reverse Mortgage)
In addition, the new endorsement forms listed below have been adopted:
·         ALTA End’t No. 29.2-06 (Interest Rate Swap – Direct Obligation – Defined Amount)
·         ALTA End’t No. 29.3-06 (Interest Rate Swap – Additional Interest – Defined Amount)
·         ALTA End’t No. 31-06 (Severable Improvements)
·         ALTA End’t No. 33-06 (Disbursement)
ALTA Nos. 29.2-06 and No. 29.3-06 supplement the ALTA Nos. 29 -06 and 29.1-06, which were previously approved for use. The charge for each of the ALTA 29 series forms is the same: A 5% premium surcharge is imposed if issued along with the policy; a 10% surcharge if issued at a later date. ALTA No. 31-06 is primarily intended for use in connection with transactions involving power generation or similar industrial facilities, wherein much of the value consists of non-fixture equipment located on the insured realty. A 20% premium surcharge has been approved for its issuance. ALTA No. 33-06 is intended to be issued only in conjunction with loan policies insuring construction mortgages. It supplements (but does not replace) the various non-standardized forms currently used to insure construction loan advances.
However, the most significant action approved by DOBI is the withdrawal of the ALTA Residential Owner’s Policy (1987), which had been the primary vehicle for effectuating owner’s coverage in
residential transactions.           As a result, residential
owner’s coverage will only be available through either the ALTA Owner’s Policy (2006) – heretofore used for commercial transactions – or the ALTA Homeowner’s Policy (2010) – a so-called “enhanced coverage” form.
Because the ALTA Homeowner’s Policy (2010) provides additional protection to the insured, a 20% premium surcharge had previously been approved for its issuance. (The ALTA Owner’s Policy (2006) is issued at the same rate as the ALTA Residential Policy (1987), which has now been withdrawn.) Some of the additional coverages provided by the ALTA Homeowner’s Policy (2010) are set forth below:
?Amount of Coverage. Face amount of policy automatically increases by 5% every year for the first five (5) years, up to 125% of face amount of policy.
?Access. Both pedestrian and vehicular access are insured.
?Forgery. Protection against future forgery.
?Future Encroachments. Loss arising from future encroachments caused by structures (other than boundary walls and fences) erected by adjoining owners.
?Reversion of Title. Loss if title reverts because of a prior violation of a restrictive covenant.
?Restrictions. Loss arising from the enforcement of restrictive covenants which were previously violated, and for unmarketability of title resulting from the prior violation of restrictive covenants
?Subdivision. Loss arising from certain conse- quences of failure to comply with subdivision laws or regulations.
?Building Permit. Enforced removal of structures (other than boundary walls or fences) arising from lack of a building permit.
?Enforced removal. Loss arising from enforced removal of encroachments onto adjoining land.
?Zoning. Enforced removal of structures (other than boundary walls or fences), or inability to use the insured land as a single-family residence, on account of zoning violations.
Nevertheless, some of the additional coverages afforded by this policy are subject to deductibles and maximum loss payments (“caps”). For example, subdivision-related loss is subject to a deductible of 1% or $2,500 (whichever is less) and a cap of $10,000. Building permit-related loss and enforced removal of structure (owing to zoning violation) are each subject to a deductible of 1% or $5,000 (whichever is less) and a cap of $25,000.
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