Bulletin: CO2019001

Dear Associates:

Colorado House Bill 19-1098 became effective as of March 8, 2019, and made changes to Colorado’s laws involving deed warranties and preparation of deeds by title insurance entities.

The current versions of the Colorado Division of Real Estate approved Contract to Buy and Sell require that a list of certain title exceptions are attached as an exhibit to all conveyance deeds containing warranties of title. House Bill 19-1098 was passed to address the use of those title exception exhibits. Among other things, House Bill 19-1098 creates and defines the term “Statutory Exceptions” which may be inserted into a conveyance deed and will limit the warranties of title without the need for a title exceptions exhibit.

Included within the definition of “Statutory Exceptions” are (1) Real estate taxes for the calendar year in which the conveyance occurs and subsequent years that are not yet due and payable, (2) All matters that are disclosed or that would have been disclosed by an improvement survey plat of the property or that could have been ascertained by an inspection of the property, which matters were not created or otherwise known by the grantor, and (3) All matters recorded in the real estate records of the county clerk and recorder for the county in which the property is located.

In addition, House Bill 19-1098 expressly authorizes licensed title insurance entities to draft deeds containing warranties of title as long as said warranties are subject to the Statutory Exceptions. However, the statutory authorization for title insurance entities to draft these specific deed forms only applies when the deeds are drafted in connection with the issuance of a policy of title insurance. In that scenario, any liability arising from errors or mistakes in the deed may fall on the title insurance entity. In all other scenarios, any deed drafted by a title insurance entity is drafted in its role as the scrivener for the real estate agents in the transaction.

In response to House Bill 19-1098, the Colorado Division of Real Estate has updated the approved forms for the various Contracts to Buy and Sell. Unless the parties to the transaction direct otherwise, the default direction in the Contract forms now calls for the property to be conveyed via a Special Warranty Deed subject to Statutory Exceptions. The revised Contract forms are available for use now and will become mandatory as of July 1, 2019.

Notwithstanding the provisions of House Bill 19-1098, the parties to a transaction may still direct a title insurance entity to prepare some other form of deed which does not limit the warranties of title via the Statutory Exceptions. As discussed above, in that scenario, the title insurance entity reverts to its role as the scrivener for the real estate agents.

Please contact your title software vendor or provider in order to assure that the updated deed forms containing the Statutory Exceptions language are available for use.

The Division of Real Estate Approved Contracts and Forms may be viewed here.

House Bill 19-1098 may be viewed here.

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

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