For those who attended our Webinars on the new 2006 ALTA Policies, Stewart highlighted several key areas including the survey coverage. There have been questions regarding the survey coverage provided in the new Polices so Stewart would like to take this time to review the procedures to be followed regarding survey issues.
First as a reminder, all of the Webinar materials, the policy comparisons between the 1992 and 2006 Policies, and previous Stewart bulletins on the subject are all prominently displayed on our website at www.stewartnewyork.com. As suggested at the Webinars, Stewart strongly encourages you to review this material and discuss it with the appropriate personnel on your staffs.
2006 ALTA Policy Survey Requirements
The survey coverage provided under Covered Risk 2(c) in the 2006 ALTA Loan and Owners Policies (the "default survey coverage") must be read in conjunction with the Standard New York Endorsements (6-17-06) and Part 1, Section 1(K) of the TIRSA Rate Manual (Fourth Reprint: May 1, 2007). The TIRSA Survey Endorsement (9/1/93) is not available in connection with the 2006 ALTA Loan Policy. From a billing perspective, there is no provision in the Rate Manual for a separate charge for the default coverage provided under Covered Risk 2(c) and a separate charge cannot be collected for such coverage under any circumstances.
The default survey coverage in the Loan Policy is only for a 1-4 family dwelling under provision 1, Standard New York Endorsement (6-17-06). Any other property including vacant land does not get the default survey coverage.
There is no default survey coverage in the Owner's Policy. It has been removed by Standard New York Endorsement (6-17-06) under provision 1.
Schedule B Exceptions
Loan Policy 1-4 family
Because coverage is afforded by default unless removed by the inclusion of an appropriate Schedule B exception, a survey affidavit in the same form as the prior survey endorsement affidavit should be taken. In the rare instances where an underwriting decision is made not to provide the default coverage under a Loan Policy covering property improved by a 1-4 Family dwelling, the following exception should be inserted in Schedule B: "Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land."
Loan Policy all others
This category is treated as it always has been, there is either a survey and reading (if applicable) or the policy must include the following language as an exception: "Subject to any state of facts an accurate survey would show." This language is mandated by the TIRSA Rate Manual under Part I, Section 1( (L)(2).
There is no change from previous guidelines. There is either a survey and reading (if applicable) or the policy must include the following language as an exception: "Subject to any state of facts an accurate survey would show." This language is mandated by the TIRSA Rate Manual under Part I, Section 1(L)(1).
Moreover, in all cases where you do not intend to give survey coverage, in addition to the exception dictated by the Rate Manual or the default language exception referenced above, the policy must include the following language as a Schedule B exception: "Exact location and dimensions of the land are not insured in the absence of an accurate survey."