This Bulletin is to advise you of changes to the New York State TIRSA Rate Manual. Attached to this Bulletin is the new revised Title Insurance Rate Manual for New York State: Sixth Revision, Effective APRIL 8, 2018. You should continue to use the Current Rate Manual for all transactions where the premium is paid prior to April 8, 2018. Also attached is a comparison between the previously effective manual and the newly approved manual.
The Sixth Revision does not contain any changes to policy rates. All rates, including any deviated rates are not affected by this manuals approval. The bulk rate has been removed from this rate manual. However, premiums for certain endorsements have increased from $25.00 to $50.00.
Changes in the Sixth Revision include:
Collateral Mortgage – A Mortgage given as additional security for the same indebtedness or obligation secured by a Primary Mortgage on real property located in New York State.
Commercial Real Property – Real property other than Residential Real Property.
Consideration – Anything of value being paid or transferred to the transferor in exchange for the real property or cooperative unit, or interest therein, plus the amount of any lien or encumbrance, whether or not assumed or taken subject to, remaining on the real property or cooperative unit, or interest therein, at the time of transfer, except as otherwise expressly set forth in this Manual (see Section 9 (C) – (Construction Mortgage Insurance – Construction Mortgage Conversion Insurance – Minimum Insurance), Section 12 (B) (iii) and (D) (iii) – (Refinance Mortgage and Refinance Construction Mortgage), Section 13 (B) (iii) and D (iii) (Mortgage Modification and Construction Mortgage Modification) and Section 28 (Continuation of Insurance)).
Construction Mortgage Policy – A Loan Policy, including a Leasehold Loan Policy, insuring a Construction Mortgage.
Construction Mortgage Rate – The rate provided in Section 9 (A) (Construction Mortgage Insurance – Construction Mortgage Conversion Insurance – Minimum Insurance) of this Manual.
Investor – A person or entity acquiring an interest in an entity that is the record owner or lessee of real property or the owner of a cooperative interest.
Modification Construction Mortgage Rate – The rate provided in Section 13 (C) (Mortgage Modification and Construction Mortgage Modification) of this Manual.
Modification Rate – The rate provided in Section 13 (A) (Mortgage Modification and Construction Mortgage Modification) of this Manual.
Primary Mortgage – A Mortgage, other than a Collateral Mortgage, made by a primary obligor or guarantor to secure a loan or other obligation.
Refinance Construction Mortgage Rate – The rate provided in Section 12 (E) (Refinance Mortgage and Refinance Construction Mortgage) of this Manual.
Residential Real Property – (i) Real property improved by a 1-4 family dwelling; (ii) an individual condominium unit used as a dwelling; or (iii) an individual cooperative apartment/unit used as a dwelling. Residential Real Property does not include land which is not improved at the time of the issuance of the Policy. Real property improved by a 1-4 family dwelling used in part, but not entirely, as a professional office, shall be deemed to be Residential Real Property. Property with any other kind of mixed use shall not be deemed Residential Real Property. (See Example in Part III)
Simultaneous or Simultaneously – Occurring on the same calendar day.
The new manual also includes some Rule changes:
All charges, fees and premiums set forth in this manual, pursuant to Section 2314 of the Insurance Law, are mandatory upon each Company upon approval by the Superintendent of Insurance, and cannot be waived, reduced or increased, except as provided in Paragraph H, Section 2 hereof or as provided in Section 2339 of the Insurance Law.
Any rate, premium, fee or other charge set forth in this Manual shall apply to any transaction closed on or after the effective date of any change in such rate, premium, fee or other charge even though application may have been made prior to the effective date of this Manual.
No form of Policy, Endorsement, or other coverage may be issued which varies the Covered risks conditions, or exclusions of a Policy unless first approved by the Superintendent of Department of Financial Services. Approved Policies and Endorsements are set forth in Part IV hereto. No form of Policy not approved by the Department of Financial Services may be issued or updated by Endorsement or otherwise.
Upon notification to the applicant, a Company may decline to search, examine or insure any title, or to issue any Endorsement. A Company may, at any time, and in its sole discretion, refuse an application or cancel any unclosed application, without liability on the part of the Company.
Extra charges may be made at or after the receipt of the application for examination of title which may involve additional tax lots, multiple chains of title, land under water, land in bed of streets, rights-of-way, driveways, easements, strips and gores, foreclosures, proceedings under federal bankruptcy or state insolvency related statutes, or for other unusual difficulties in the examination of title, or for unusual expenditures for travel, or for recording instruments, or for telephone, telegraph or delivery charges. The Company may impose additional charges for closing attendance in excess of two hours and for any closings extending beyond normal business hours and where additional attendances are necessary or travel arrangements and distance warrant.
All charges pursuant to this Manual must be paid at the time of closing, unless otherwise set forth herein. The Company shall withhold delivery of the policy and shall have no liability until all applicable charges and the premiums and fees set forth in this Manual have been paid in full. A Policy, endorsement, form, guarantee, certificate of title, title report or other service authorized in this Manual which is ordered for use by an agency or department of, and for the use by, the United States Government may be delivered prior to payment therefore. Payment for such Policy or other service shall be made by said agency or department of the United States Government not more than 60 days after delivery.
A policy other than a Loan Policy, shall be issued only in the name of the present owner(s) of the insured estate or as provided in Section 18 (A) (Entity Purchase and Non Imputation Endorsement) and, if the present owner of the insured estate is acting as nominee pursuant to a written agreement, also in the name of the principal on whose behalf the nominee holds title, “as their interests may appear”, provided that the principal holds no other estate or interest in the land. Except as provide in (i) below no other party holding a separate estate or interest may be named as an insured "as its interest may appear".
FOR OWNER’S POLICIES:
In the absence of a survey acceptable to the Company the Policy shall contain the following language or language similar meaning: "Subject to any state of facts an accurate survey would show".
- For Residential Real Property only, the Company shall charge to omit, by inspection, an exception for changes subsequent to the date of the existing survey.
- For Commercial Real Property, an exception for changes subsequent to the date of the existing survey shall be omitted only upon receipt of an updated survey acceptable to the Company.
FOR LOAN POLICIES:
- For Commercial Real Property in the absence of a survey acceptable to the Company, the Policy shall contain the following language or language of similar meaning: "Subject to any state of facts an accurate survey would show".
- Except as provided in (b) below, for Commercial Real Property, an exception for changes subsequent to the date of the existing survey may be omitted without an updated survey.
- For Commercial Real Property, if the Mortgage secures a building loan or a project loan, an exception for changes subsequent to the date of the existing survey shall not be omitted except upon receipt of an updated survey acceptable to the Company.
- For Residential Real Property, nothing herein shall prohibit a Company from raising an exception for any state of facts an accurate survey would show or changes subsequent to the date of an existing survey, as applicable.
The Policy forms in this Manual for cooperative leasehold insurance are the ALTA Owners’ Policy with the Cooperative Endorsement (Owner’s) and the ALTA Loan Policy with the Cooperative Endorsement (Loan).
New Sections of the Rate manual include:
Section 5 (C) - Amount of Insurance Endorsement: This section allows the same title company to increase the amount of insurance of a previously issued Owner’s policy with the Amount of Insurance Endorsement. The premium for this endorsement is calculated using the applicable bracketed rates in Part II of the New York State TIRSA Rate Manual starting at the amount of insurance of the previously issued policy based on the Owner’s rate in effect at the time of such endorsement. There is no change in the date of the policy.
An example of the calculation of this rate is as follows: An Owner’s Policy for $500,000 was previously issued. The current fair market value of the property is $600,000. The Insured wishes to increase the amount of the Owner’s Policy. The amount of the increase shall not be less than $100,000. Only the same underwriter (either directly or through its agent) that issued the Owner’s Policy may issue the Increase in Amount of Insurance Endorsement (Owner’s). The premium for the Endorsement will be the Bracketed Rate in effect at the time the Endorsement is issued. The premium for the Endorsement increasing the amount of the Owner’s Policy from, in this example, $500,000 to $600,000 is calculated as follows:
500,001 to 600,000 (99,999 x 3.98) = $ (Do Not Round)
Premium equals= Rounded to $____.00
Section 9- Construction Mortgage Insurance
Section 9 (B) is a new section that deals with the situation of a “series" of construction loan mortgages. This type of transaction was not previously specified in the prior manual. The proposed section adds further language for clarification purposes involving the rules for the modification of an existing construction loan mortgage. This section will insure proper remittance coding for statistical purposes Section 9(B) provides that when a Construction Loan is secured by a series of Construction Mortgages which are not to be recorded simultaneously, and the Construction Mortgage Policy insures the aggregate amount of said Mortgages, the premium shall be calculated on the aggregate amount of the Construction Mortgages.
Section 9 (C) provides that when a Construction Loan is secured by a series of Construction Mortgages which are not to be recorded simultaneously, and a separate Construction Mortgage Policy is issued for each Mortgage, the premium shall be calculated on each Policy with no aggregation. A Construction Mortgage Policy was insured covering tax lot 27. Subsequent to the third advance of the Construction Loan, the premises are subdivided into a ten unit condominium. For the fourth and fifth advance under the Construction Loan, the Company performing the continuations shall charge for nine additional searches. This rule applies notwithstanding that had the premises not been subdivided, the title continuations for the fourth and fifth advance would have been included in the premium for the Construction Mortgage Policy. On all continuations after the fifth, the Company shall charge for searches on all ten tax lots.
Section 10 - Simultaneous Issue of Owners and Loan or Constriction Mortgage Policies:
Section 10(A) (ii) provides that when an Owner’s Policy and Loan Policy are issued simultaneously, and the Loan Policy covers identical property or a part thereof and additional property previously acquired (not simultaneously acquired) the rate for the Loan Policy shall be the Refinance Rate.
Section 10(B) (ii) provides that when an Owner’s Policy, and a Construction Mortgage Policy are issued simultaneously, and the Construction Mortgage Policy covers identical property or a part thereof and additional property previously acquired (not simultaneously acquired), the rate for the Loan Policy shall be the Refinance Construction Mortgage Rate.
Section 13 -Modification and Construction Mortgage Modification (No New Money).
This section creates a Modification Construction Mortgage Rate, which is 50% of the Owner’s Rate. The premium includes the cost of the first five continuations the closing of the modification.
Section 15- Collateral Mortgages
Collateral Mortgages are now a defined term under the Part I of the TIRSA Manual. Section 15(A) states that no additional shall be premium charged by the same Company for a loan policy insuring one or more collateral mortgages issued simultaneously with the loan policy or construction mortgage policy insuring a primary mortgage when the collateral mortgages secure no additional indebtedness.
Section 15(B) allows a work charge based on the property encumbered by the Collateral Mortgage, when a single policy or when separate policies are issued by the same company insuring a primary mortgage and a collateral mortgage. The charge is to be no less than $350.00 for Residential Real Property and no less than $750 for Commercial Real Property,
Section 15(C) contains mandatory language to be contained in policies for loan polices insuring a primary mortgage and collateral mortgage.
Section 18- Entity Purchase and Non-Imputation Endorsement
The Section creates 3 Non-Imputation Endorsements that replace the previously issued TIRSA Non- Imputation Endorsement. The charge for these new endorsements are 20% of the Owner’s rates, the same as the previously issued Non-Imputation Endorsement.
The new endorsements are:
- Full Equity Transfer Non Imputation Endorsement – This Endorsement is applicable when an Owner’s Policy is issued directly to the Vestee of Real Property Interest and where an Investor is acquiring a 100% interest in the Vestee.
- Partial Equity Transfer Non Imputation Endorsement- This Endorsement is applicable when an Owner’s Policy is issued directly to the Vestee of Real Property Interest and where an Investor is acquiring less than a 100% interest in the Vestee.
- Additional Insured Non Imputation Endorsement -This Endorsement is applicable when an Owner’s Policy is issued directly to a new Vestee acquiring a Real Property Interest and Insured is comprised of the Investor and party or parties who have an interest in the entity that is conveying the Real Property Interest.
Section 21: Contract Vendee Insurance- Minimum Insurance
Section 21 (B) changes to the premium for a Commercial Contract Vendee Endorsement premium to the Owner’s rate. It was previously 120% of Owners Rate
Section 27 (9) New York City Development Rights Endorsement.
This endorsement now requires title insurer approval.
The Stewart Title Rate Calculator will be updated on April 8, 2018 to reflect the changes in the Sixth Revision. A full copy of the rate manual and associated remittance codes are attached to this bulletin. The bracketed rates including any deviations filed by Stewart, for each zone have not changed. New Part III in the Rate Manual contains examples of how to apply the provisions of the Rate Manual to various situations. Stewart encourages all of its policy issuing offices to be fully familiar with all aspects of the rate manual.
Please review the examples provided in the new Rate Manual or contact Agency Legal Services at 212-922-0050 in the event you have any questions.
Attachments: 2018 TIRSA Rate Manual; 2018 Revised Remittance Codes; Rate Manual Comparison Chart