Guideline: ALTA Endorsement 36.9 (Energy Project - Minerals and Other Subsurface Substances - Land Under Development)

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Guideline: ALTA Endorsement 36.9 (Energy Project - Minerals and Other Subsurface Substances - Land Under Development)

Guideline Document

Explanation: 

This endorsement is one of a series of endorsements designed specifically for energy projects (e.g., wind farms, solar farms, traditional electricity generating facilities, etc.). Such projects may include fee parcels, leaseholds, and/or easements. The endorsement is modeled on and provides coverage similar to ALTA Endorsement 35.3-06 (Minerals and Other Subsurface Substances - Land Under Development).

Similar to other ALTA 36 series endorsements, this endorsement contains an expansive definition of “Electricity Facility” that includes an existing electricity generating facility and an electricity generating facility under construction or to be built on the Land in locations according to defined “Plans” depicting the project. This endorsement also contains a definition of existing and future “Severable Improvements” linked to the definitions of Electricity Facility and the Plans. 

The endorsement insures against loss or damage to improvements to be affixed to the Land post policy if such improvements are affixed in the locations shown on Plans provided by the insured. Such loss or damage must result from the enforced removal or alteration of an Electricity Facility or Severable Improvement due to the future exercise of any right existing at the Date of Policy to use the surface of the Land for the extraction or development of minerals, or any other subsurface substance, excepted from the legal description or excepted in Schedule B of the policy. 

Underwriting Requirements:

In order to provide the coverage, comply with the following requirements:

(1)  The project must involve an electricity generating facility (e.g., wind farms, solar farms, traditional electricity generating facilities, etc.). The electricity facility can be existing or to be built or under construction. 

(2)  This endorsement is designed primarily for a policy insuring an energy project under construction or to be built. However, it can be used for an existing, completed energy project with appropriate modification to the definitions of Electricity Facility and Severable Improvement, and deletion of the references to the Plans.

(3)  Verify that there are no severed or reserved minerals or other subsurface substances (other than royalties) or that all surface rights have been waived by the mineral owners;

(4)  If minerals have been severed or reserved in any manner:

a.    If the project is to be built or under construction, obtain and retain a set of the Plans for the project (survey, site and elevation plans or other depictions or drawings prepared by an architect or engineer). Such Plans must be referenced in the endorsement. If the project is completed or existing, and no construction is contemplated, you may waive the requirement of the Plans and modify the endorsement to delete the reference to the Plans. 

b.    Obtain a current, accurate survey, which shows the location of: (a) all existing improvements and all proposed improvements, such as the solar array, the wind turbines, battery improvement, substation, set aside areas (if any), transmission lines and any other facility on the land or to be placed on the land and (b) all existing and proposed easements.  

c.    Obtain drawings or depictions showing the location of mineral ownership tracts that affect the Land;

d.    Obtain a mineral resource report which shows mineral activity on the Land and within the surrounding three miles radius;

e.    Obtain a mineral ownership report showing the names of the mineral owners of the mineral estates affected by the energy project;

f.     Obtain, when necessary, Affidavits of Non-Production from project site landowners;

g.    Factors of relevance include percent of minerals or other subsurface substances severed or reserved, how long ago the minerals were reserved, who owns the minerals, zoning prohibitions, waivers of surface rights, development in the area, and any applicable Accommodation Doctrine, Dormant Mineral Statute or Surface Damage Law. 

(5)  Secure approval from a Stewart Title Guaranty Company Senior Underwriter.

(6)  Indicate in Paragraph 4.c. any mineral interest you intend to exclude from coverage. If there is none, then indicate “None” in the blank.

Any revision to this form requires approval of a Stewart Title Guaranty Company underwriter. The underwriting guidelines contained herein have been provided for general reference. The facts, circumstances, and location of the subject property should be considered when determining the issuance of the requested form or endorsement. Please note that all of the forms and endorsements included in this system may not be available in all states. Accordingly, please contact the appropriate Stewart Title Guaranty Company underwriting personnel in order to determine availability.

Compliance with the underwriting guidelines contained herein in no way obligates Stewart Title Guaranty Company to issue any form or endorsement.

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