At Continental Title, we like to keep you in the loop regarding trends and changes in our industry. Recently, the American Land Title Association (ALTA) implemented some changes to the commitment form used for all new orders nationwide. The details of the commitment itself are not changing, but you will notice it has a new look. This does not change how Continental Title conducts searches or examinations or how we clear requirements, but it does clarify the coverage that the commitment provides as well as limits it to six months. Read on for details, and always feel free to reach out to us with questions at info@ctitle.com.
Background
ALTA is in charge of reviewing, updating, and distributing the closing forms used by title insurance companies across the country. ALTA originally adopted the commitment form in 1966, and it wasn’t until 2006 that significant revisions were made. In 2016, ALTA completely revised the form and adopted it on August 1st, 2016. They will ‘decertify’ the 2006 form on December 31st, 2017. Continental Title will start using the new ALTA commitment form on October 1st, 2017 for all new orders.
The New ALTA Commitment Form
The 2016 commitment is broken into six sections:
- Notice
- Commitment to Issue Policy
- Commitment Conditions
- Schedule A
- Schedule B, Part I Requirements
- Schedule B, Part II Requirements
So, what new language will you see on your commitment form? For starters, every page of the commitment will include the following disclosure, which identifies the components of the form needed to ensure validity:
This page is only a part of a 2016 ALTA Commitment for Title Insurance issued by Continental Title Company. This commitment is not valid without the Notice; the Commitment to Issue Policy; the Commitment Conditions; Schedule A; Schedule B, Part I-Requirements; [and] Schedule B, Part II-Exceptions[; and a counter-signature by the Company or its issuing agent that may be in electronic form].
The new commitment will also include this notice, which states the purpose of the form as well as legal roles and responsibilities of the parties involved:
- IMPORTANT—READ CAREFULLY: THIS COMMITMENT IS AN OFFER TO ISSUE ONE OR MORE TITLE INSURANCE POLICIES. ALL CLAIMS OR REMEDIES SOUGHT AGAINST THE COMPANY INVOLVING THE CONTENT OF THIS COMMITMENT OR THE POLICY MUST BE BASED SOLELY IN CONTRACT.
- THIS COMMITMENT IS NOT AN ABSTRACT OF TITLE, REPORT OF THE CONDITION OF TITLE, LEGAL OPINION, OPINION OF TITLE, OR OTHER REPRESENTATION OF THE STATUS OF TITLE. THE PROCEDURES USED BY THE COMPANY TO DETERMINE INSURABILITY OF THE TITLE, INCLUDING ANY SEARCH AND EXAMINATION, ARE PROPRIETARY TO THE COMPANY, WERE PERFORMED SOLELY FOR THE BENEFIT OF THE COMPANY, AND CREATE NO EXTRA CONTRACTUAL LIABILITY TO ANY PERSON, INCLUDING A PROPOSED INSURED.
- THE COMPANY’S OBLIGATION UNDER THIS COMMITMENT IS TO ISSUE A POLICY TO A PROPOSED INSURED IDENTIFIED IN SCHEDULE A IN ACCORDANCE WITH THE TERMS AND PROVISIONS OF THIS COMMITMENT. THE COMPANY HAS NO LIABILITY OR OBLIGATION INVOLVING THE CONTENT OF THIS COMMITMENT TO ANY OTHER PERSON.
Lastly, disclosure requirements of the new commitment have been updated:
LIABILITY OF THE COMPANY MUST BE BASED ON THIS COMMITMENT.
- Only a Proposed Insured identified in Schedule A, and no other person, may make a claim under this Commitment.
- Any claim must be based in contract and must be restricted solely to the terms and provisions of this Commitment.
- Until the Policy is issued, this Commitment, as last revised, is the exclusive and entire agreement between the parties with respect to the subject matter of the Commitment and supersedes all prior commitment negotiations, representations, and proposals of any kind, whether written or oral, express or implied, relating to the subject matter of this Commitment.
- The deletion or modification of any Schedule B, Part II-Exception does not constitute an agreement or obligation to provide coverage beyond the terms and provisions of this Commitment or the Policy.
- Any amendment or endorsement to this Commitment must be in writing [and authenticated by a person authorized by the Company].
- When the Policy is issued, all liability and obligation under this Commitment will end and the Company’s only liability will be under the Policy.