Bulletin: CO000033

Dear Associates:

The following is a summary of bills enacted by the 2001 Colorado Legislature and subsequently signed into law by Governor Owens which have some impact, either directly or indirectly, on the business of title insurance in Colorado. Unless otherwise noted the effective date of each of these bills is July 1, 2001.

Senate Bill 240 (Concerning Notice Requirements for Persons Holding title to Property in a Representative Capacity)

Allows a trustee who holds title to real property on behalf of a trust to give notice of that trustee's representative capacity either before or after the instrument conveying the interest in real property has been recorded. Repeals the prohibition of such notice after an instrument conveying an interest in real property has been recorded. (This bill is intended to overcome the problems which have arisen under C.R.S. 38-30-108 and the recent Lagae v. Lackner case.) The bill also adds a new subsection which allows a trust to hold title in the name of the trust by recording a "statement of authority" pursuant to C.R.S. 38-30-172(2) but without recording an affidavit as required by the current language in the statute. A separate Bulletin will be issued on this subject which Bulletin will modify Colorado Bulletin No. CO000020. (Affects C.R.S. 38-30-108, 38-30-108.5, 38-30-109, and 38-30-166).

Senate Bill 40 (Concerning the Uniform Commercial Code - Secured Transaction)

Repeals and re-enacts UCC Article 9 on Secured Transactions. The National Conference of Uniform Laws Commission has approved a substantial revision of Article 9, which has been adopted by 47 states and the District of Columbia and is effective July 1, 2001. The changes in Article 9 have changed the filing forms that are acceptable to the Colorado Secretary of State. Colorado Secretary of State-approved, Revised Article 9-compliant paper UCC forms for (a) initial financing statements, (b) amendments, assignments, continuations, terminations, etc., (c) addenda and (d) information requests, are available on line at http://www.sos.state.co.us/pubs/business/pdf/formsindex.html. A copy of these forms may also be obtained by contacting the Business Division of the Secretary of State's office at 1560 Broadway, Suite 200, Denver, CO 80202-5169, Call Center (303) 894-2251. (Affects Article 9 of Title 4, C.R.S.).

House Bill 1055 (Concerning a Requirement that Title Insurance Companies File Fees with the Commissioner of Insurance)

Corrects the drafting error in Senate Bill 106 from last session, adding the two words "or fee" where they were left out. This bill, which is effective March 9, 2001, makes it clear that title insurance companies and title insurance agents must file "fees" with the Division of Insurance. The Division defines fees as those charges made for closing and settlement services and incidental charges. Please review Stewart Title Guaranty Company Bulletin CO000031 dated October 18, 2000 that advises that Stewart Title Guaranty Company does not file "fees" and therefore a separate filing for escrow, closing and settlement charges should be filed by each agency performing closing or settlement services. (Affects Article 2 of Title 10, C.R.S.).

House Bill 1088 (Concerning Notifications Regarding Severed Mineral Rights )

Requires surface owner to provide mineral estate owners with written notice 30 days prior to the time of any necessary public hearing regarding impending surface development, zoning changes and subdivision. Title agents or companies must disclose the fact of a severance or other conveyance of a mineral right related to the sale of real property and issuance of an owner's policy. Title agents and companies may rely on the records of the county clerk that give constructive evidence of such a severance. Colorado Bulletin No. CO000032, relating to the effects of this bill on the title agent was distributed in June, 2001. (Affects C.R.S. 10-11-123, 24-67-107, 30-28-133, 31-23-215 and 34-60-106, adds a new article 65.5 to Title 24).

House Bill 1281 (Concerning Master Form Instruments for Real Estate)

This bill authorizes any person to record a "master form mortgage or deed of trust" in the office of the county clerk. These master forms are indexed in the grantee index under the name of the lender causing them to be recorded. Mortgage documents can then be incorporated by reference to the master document, and eliminate paperwork that other wise would have to be filed with the county clerks. The reference must include the master form recording information. (Affects C.R.S. 38-35-109).

This memorandum is intended to provide general information on new statues affecting title insurance in Colorado. As additional issues or questions arise regarding specific procedures to be followed in each case, please don't hesitate to contact your Stewart Title Guaranty Company underwriting personnel.