Bulletin: NJ2012005

Dear Associates:

The New Jersey Department of Banking and Insurance has recently approved modifications to the following forms effective November 16, 2012:

ALTA Expanded Coverage Residential Loan Policy (NJRB 2-11). This form is now being identified as a New Jersey variation of the ALTA form. The policy is being identified in this fashion because reference is made to NJ variations of the ATLA Endorsements 8.1 and 9.3.

ALTA Endorsements 9-06 through 9.3-06. The changes adopted include a preamble that references the policy terms, insured matters are referenced in the singular as opposed to the plural, old section 1(b) 2 has been removed as has the mineral coverage set forth in section 2 of the 9.1, 9.2 and 9.3.

The ALTA 9.4-06 (NJRB 5-99) and ALTA 9.5-06 (NJRB 5-100) have been withdrawn and are no longer available in New Jersey.

The ALTA 9 series of endorsements (NJRB 5-95, 96, 97, 138, 139 and 140) are designated as New Jersey variations because reference is made therein to covenants, conditions, restrictions or limitations adopted by the Department of Community Affairs or Council on Affordable Housing.

The ALTA 13-06 (NJRB5-105) and 13.1-06 (NJRB5-106) have been modified to reflect that a loss occasioned by eviction where the land is to be restored to the extent damaged by the removal and relocation of the personal property is a loss covered by the endorsement.

The New Jersey Department of Banking and Insurance has approved the following forms for use in New Jersey as of November 16, 2012:

The ALTA 9.6-06 (NJRB 5-138) has been adopted for loan policies. This form insures against loss occasioned by the enforcement of a Private Right in a Covenant affecting title that results in the invalidity, unenforceability or lack of priority of the insured mortgage, or a loss of title that was acquired in satisfaction of the indebtedness. The charge for this endorsement is $25.00 for a 1-4 family residential property or 10% of the premium if being issued in connection with a commercial transaction with a minimum $100.00 charge.

The ALTA 9.7-06 (NJRB 5-139) has been adopted for use with a loan policy. The ALTA 9.8-06 (NJRB 5-140) has been adopted for use with owner’s policies. These forms insure against loss or damage by reason of the violation of certain enforceable covenants by an improvement on the land at the date of the policy or by a future improvement to be constructed in accordance with certain specified plans subject to the exceptions set forth on the forms. The charge for the 9.7-06 is $25.00 for a 1-4 family residential property or 10% of the premium if being issued in connection with a commercial transaction with a minimum $100.00 charge. The charge for the ALTA 9.8-06 is 10% of the standard underwriting charge with a minimum charge of $100.00.

The ALTA 3.2-06 Zoning - Land Under Development. This endorsement insures that the land is classified in a particular zone and that certain uses are permitted. The endorsement is designed to be issued where land is being developed. The charge for this endorsement is 20% of the standard underwriting rate with a minimum charge of $150.00

ALTA 28.1 Encroachments - Boundaries and Easements. New Jersey Variation. This endorsement may be issued with loan policies only. The endorsement insures against loss occasioned by an encroachment of any improvement on the land onto adjoining land or onto an easement unless specifically excepted in schedule B of the policy; an encroachment of an improvement on adjoining land onto the insured land at the time of the policy, unless specifically excepted in schedule B; enforced removal of any improvement on the insured land subject to an easement in the event the owners of the easement compel the removal of improvements in order to exercise their right to use or maintain the easement; enforced removal of an improvement on the land that encroaches onto adjoining land. The underwriting charge for the endorsement is $25.00.

ALTA 34-06 Identified Risk Coverage. This endorsement insures against loss or damage resulting from a final order enforcing the identified risk in favor of an adverse party or the release of a prospective purchaser, lessee, or lender from the obligation to purchase, lease or lend due to the identified risk, provided there is contractual obligation requiring delivery of marketable title and neither the company nor any other title insurance company will insure over the identified risk with the same conditions as the endorsement. The charge for this endorsement is $25.00 unless the risk involves special risk or hazard in which case the charge shall be in accordance with section 3.1.5 of the New Jersey Rate Manual. Please contact the state office prior to issuance in that instance.

ALTA 35-06, 35.1-06, 35.2-06 and 35.03-06 (Minerals and other Subsurface Substances). These endorsements provide coverage for loss occasioned by the enforced removal of buildings or other improvements on the land as a consequence of the future exercise of a right to use the surface of the land for the extraction of minerals or any subsurface substances. The 35-06 insures against damage to buildings, the 35.1-06 for buildings, walkways, curbing and driveways, the 35.2-06 is used for specifically described (itemized) improvements and the 35.3-06 is for land under development. The charge for these endorsements is $25.00 if issued in connection with a 1-4 family house or 10% of the premium with a $100.00 minimum otherwise.

ALTA 36-06 (Energy Project - Leasehold/Easement - Owners) ALTA 36.1-06 Energy Project-Leasehold/Easement-Loan). These endorsements insure against loss occasioned by the lawful deprivation of the right of possession or right to use the insured land contrary to the terms if the insured lease or easement or the lawful prevention of the use of the land or any Electrical Facility or Severable Improvement for the purposes permitted by the lease or easement. The charge for these endorsements is 10% of the premium with a $100.00 minimum charge.

ALTA 36.2-06 (Energy Project Leasehold Owner’s) ALTA 36.3-06 (Energy Project Leasehold Loan). These policies insure against loss occasioned by eviction contrary to the terms of the lease or the lawful prevention of the use of the land or any Electrical Facility or Severable Improvement for the purposes permitted by the lease. The charge for these endorsements is 10% of the premium with a $100.00 minimum charge.

ALTA 36.4-06 (Energy Project - Covenants Conditions and Restrictions - Land Under Development - Owners). This endorsement insures against loss by reason of 1. A violation of an enforceable covenant by an Electrical Facility or Severable Improvement unless specifically excluded in schedule B of the policy. 2. Enforced removal of an Electrical Facility or Severable Improvement as a result of a violation of a setback line unless an exception is set up in schedule B of the policy. 3. A notice of a violation recorded in the public record relating to environmental protection unless specifically excepted in Schedule B. The charge for this endorsement is 10% of the premium with a $100.00 minimum.

ALTA 36.5-06 (Energy Project Conditions and Restrictions - Land Under Development - Loan). This endorsement insures against loss by reason of violations of enforceable covenants, conditions and restrictions by any Electricity Facility or Severable Improvement unless an exception is taken in Schedule B of the policy. The charge of the endorsement is 10% of the premium with a minimum charge of $100.00.

ALTA 36.6-06 (Energy Project Encroachments). This endorsement insures against loss by reason of: 1. An encroachment by an Electricity Facility or Severable Improvement onto adjoining land or onto land subject to an easement unless specifically excepted in Schedule B; 2. An encroachment of an improvement on adjoining land onto the insured land at the time of the policy unless an exception is set up in BII for the encroachment; 3. Enforced removal of an Electricity Facility or Severable Improvement located on or encroaching onto an easement in the event the owners of the easement  compel the removal or relocation of the Electricity Facility or Severable Improvement for the purpose of maintaining the easement or use of the easement; 4. Damage to any Electricity Facility or Severable Improvement that is located on or encroaches onto an easement resulting from the exercise of the right to maintain the easement for the purpose for which it was granted. The charge for this endorsement is 10% of the premium with a minimum charge of $100.00.

Rate Manual Section 4.8 is clarified with the insertion of “Loan Policy” to delineate that the endorsements referenced therein run to a loan policy. Section 4.9 is amended to reflect that the minimum premium on a Balloon Loan Policy is $200.00 with an exam charge of $100.00.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.