Stewart Title Guaranty Company has experienced significant claims because of outstanding rights to mineral and other substances that were not excepted in the title insurance policy.
These losses often have occurred because the search of title was not long enough to discover the severance of rights in mineral and other substances, or because the title insurance agent relied on a starter, such as a prior title insurance policy.
1. For all counties except, Cook, DuPage, Lake, Will, Kendall, Kane, McHenry, Boone, DeKalb, Lee, Ogle, Winnebago, Stephenson, Jo Daviess, Carroll and Whiteside:
Add the following exception in Schedule B of each Commitment, Binder, or Policy, other than a Short Form Loan Policy, unless you secure Underwriter approval to remove or modify the exception. Deletion or modification of the exception generally will be based upon an extended search and examination required by the Underwriter and/or consideration of any state law reserving mineral or similar rights apart from patent reservations.
"Minerals of whatsoever kind, subsurface and surface substances, including but not limited to coal, lignite, oil, gas, uranium, clay, rock, sand and gravel in, on, under and that may be produced from the Land, together with all rights, privileges, and immunities relating thereto, whether or not appearing in the Public Records or listed in Schedule B. The Company makes no representation as to the present ownership of any such interests. There may be leases, grants, exceptions or reservations of interests that are not listed."
2. For all counties including Cook, DuPage, Lake, Will, Kendall, Kane, McHenry, Boone, DeKalb, Lee, Ogle, Winnebago, Stephenson, Jo Daviess, Carroll and Whiteside:
Always include in Schedule B any specific grant, reservation, or lease of minerals or other substances (such as caliche, gravel, rock, coal, lignite) that your search reflects. You should also add the following at the end of the specific exception (although the policy does not insure the title to any interest that is excepted): "The Company makes no representation as to the present ownership of any such interests. There may be leases, grants, exceptions or reservations of interests that are not listed."
If you have customarily included a patent and waters exception, you should continue to do so. A common patent exception is: "(a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the Public Records.” If you remove any patent exception, you should review the patent and be satisfied that applicable state or federal law enabling the patents does not reserve any minerals or similar rights.
In addition, Issuing Offices in the counties excepted in section 1 above should nevertheless raise the exception shown in section 1 above, as appropriate, should the office have knowledge of, become aware of, or have reason to believe that any such right to minerals or other substances exists or could exist on any particular property.
The foregoing policy does not affect the potential availability of endorsements that provide coverage for damage to buildings or improvements on the land resulting from the future exercise of any right to use the surface of the land for the extraction or development of minerals or any other subsurface substances, such as the ALTA 9-06 series and the ALTA 35-06 series, pursuant to applicable Guidelines.
This bulletin does not supersede the requirements set forth in SLS2013009: FDIC Owned Real Estate Mineral Reservation.
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.