Underwriting Manual: Environmental Laws

State Supplements

View state supplements to the national underwriting manual.

Underwriting Manual Subtopic

In General

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Environmental law has developed from the common-law doctrine of nuisance. In modern times, it is based on the principle of reserving and protecting the human environment in an undamaged and healthy condition and in creating an enjoyable and harmonious relationship between man and the environment.

To avoid or prevent the destruction and degradation of the natural environment, several measures have been adopted by the federal government, congress, state legislatures, and municipalities.

This environmental protection effort was initiated by Congress in l969 with the enactment of the National Environmental Policy Act (NEPA) and has continued with the passage of laws and regulations dealing with wetlands, flood plain zoning, coastal zones, pollution (air, water, and noise), and hazardous or radio-active waste.

Underwriting Manual Subtopic

Federal Statutes Regarding Environmental Laws

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The following is a list of statutes enacted by the federal government applying exclusively to environment protection. These federal statutes contain provisions creating liens on real property for the purpose of reimbursing the government for the costs it may incur in the cleanup of pollution or other related expenses.

This list does not include statutes which may contain environmental provisions as a part of regulations not focused solely on the environment:

  • Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. section 9601 et seq. (known as CERCLA or Superfund);

  • Superfund Amendments and Reauthorization Act of 1986. Pub. L. No. 99-499, 100 Stat. 1613 (Known as SARA);

  • Clean Air Act, 42 U.S.C. section 7401 et seq.;

  • Clean Water Act, 33 U.S.C. section 1251 et seq.;

  • Resource Conservation and Recovery Act, 42 U.S.C. section 6901 et seq. (known as RCRA);

  • The Refuse Act, 33 U.S.C. section 407 et seq.;

  • Toxic Substances Control Act, 15 U.S.C. section 2601 et seq. (known as TSCA); and,

  • The Safe Drinking Water Act, 42 U.S.C. section 300f et seq. (known as SDWA).

Underwriting Manual Subtopic

The ALTA Environmental Protection Lien Endorsement

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The ALTA 8.1 endorsement (see 5.08.6) is designed to provide certain insurance concerning environmental protection liens only on primarily residential property. You should only issue this endorsement if the property is improved for residential purposes or if you are insuring a construction loan to add residential improvements. The endorsement is to be attached only to a loan policy and not to an owner's policy. If you are requested to issue this endorsement on commercial property or on an owner's policy, please call our underwriting personnel. We prefer to issue the commercial endorsement to the lender with exception to the "Excluded Matters" after paragraph (b) and the specific state statues listed below. Those matters are (i) plant diseases, pests, or rodents; (ii) water drainage or flood control, mining reclamation, weed abatement, or unfit buildings (where the applicable statutory provisions do not expressly relate to pollution or to hazardous or toxic wastes or substances); (iii) snow or ice removal; or (iv) charges, taxes or assessments authorized by any state statute to be imposed by local political subdivisions or districts of the state (except where such charges, taxes or assessments, by express provisions of the applicable statute, relate to pollution or to hazardous or toxic wastes or substances). If we issue the endorsement to an owner, we will generally provide only the coverage of paragraph (a) of the endorsement, relating to filed environmental liens.

Paragraph (a) of the endorsement insures that there are no environmental liens filed in the local records in accordance with state law or filed in the federal district court clerk's office which could have priority over the insured mortgage unless they are excepted in the policy. In order to provide this insurance when issuing the endorsement, you only need to review your local records. You are not required to check the federal district court clerk's office under any circumstances. Paragraph (b) of the endorsement insures that there are no existing state statutes that provide for a lien for environmental protection that can attain priority over the lien of the insured mortgage, unless the state is specifically excepted under paragraph (b).

You may secure this form from the Stewart Forms and Information Department. We have reached an agreement with Fannie Mae authorizing us to add an exclusion from coverage as to certain matters which were not intended to be included within the scope of environmental protection liens. Such matters included nuisance statutes, fire hazard statutes, weedcutting liens and other similar matters. Should any of the lenders raise question about the additional "Excluded Matters" in this endorsement, please inform them that Fannie Mae has agreed that such is acceptable language. If the language of the "Excluded Matters" is not acceptable, you may issue the standard ALTA Endorsement 8.1 and add under paragraph (b) the exceptions to specific statutes, if any, applicable in your state and shown below.

As a result of our agreement with Fannie Mae, we state "None" under paragraph (b) of the Form 8.1 endorsement in all states except the following states where our preprinted forms contain the noted exceptions:


A.R.S. Sections: 48-309; 49


Arkansas Code Annotated, Sections: 8-7-501 through 8-7-525; 14-54-901 through 14-54-904; 15-57-301 through 15-57-321; 15-58-101 through 15-58-510; 8-7-801 through 8-7-815; and 8-7-901 through 8-7-908;


Conn Gen. Stat. section 22a-452a (may be deleted if the land is exclusively residential real estate)

Explanation: This statute is the superlien statute in the state of Connecticut. Our agents may delete this exception if the property is exclusively residential.


O.G.C.A. Section 12-13-12

Explanation: This statute relates to the Underground Storage Tank Trust Fund, and does not expressly address priority, although the lien arises before filing.


65 ILCS 5/11-31-1-F


Iowa Code Section 455B.396 (may be deleted if land is single or multi-family residential property)

Explanation: This statute creates a lien in favor of the state for costs and expenses relating to cleanup of solid waste. The costs and expenses constitute a lien from the date the costs and expenses are incurred, except for single and multi-family residential property.


La. Rev. Stat. Ann. §13:2575 (applicable only to municipalities of 300,000 or more); R.S. 30:2281; R.S. 30:2204; R.S. 30:2225; R.S. 33:1236(21) (grass cutting)

Explanation: Section 13:2575 provides that certain municipalities may prescribe "civil fines for violation of... environmental... ordinances by owners" of immovable property. The city may place liens on the property for "any cost, fines and fees..." The lien "shall be included in the next annual ad valorem tax bill, subject to any valid homestead exemption."


38 M.R.S.A. Sections 1370 and 1371

Explanation: This statute is the Maine superlien statute, but our agents may delete the statute if the land is primarily used or under construction as single or multifamily housing.


Md. Environ. Code Section 7-266

Explanation: The state may assess a penalty for each day of environmental violations and impose a lien upon any property of the person.


Mass. Gen. Laws Ann. ch. 21E §13 (may be deleted if greater part of land devoted to single or multi-family housing)

Explanation: This statute is the Massachusetts superlien statute. However, our agents may delete the exception if the land is primarily devoted to single or multifamily housing.


the following citations should be reflected in paragraph (b) of the endorsement: MCL 324.11143 et seq.; MCL 324.20101 et seq.; MCL 324.21301 et seq. Also, upon request by FNMA, the citations may be shown as follows:

MCL 324.11143(3) also codified as MSA 13A.11143(3)
MCL 324.20138(2)(a), (4) and (6) also codified as MSA 31A.20138(2)(a), (4) and (6)


Minn. Stat. Ann. §§514.67; 115B.41; 115B.412

Explanation: Under Section 514.67 all charges and expenses for any inspection, examination, or other governmental service of any nature shall constitute a first lien upon all property subject to taxation as property of the person liable.

New Hampshire:

N.H. RSA 147-B

Explanation: This exception should be added unless the land is improved or under construction solely for residential purposes. This is the New Hampshire superlien statute for all costs incurred by the state in responding to a release or threatened release of hazardous waste or hazardous material. It is a first priority lien, unless the property is in use as or being constructed primarily for residential purposes.

New Jersey:

This endorsement will not insure against liens arising pursuant to the Spill Compensation and Control Act, N.J.S.A. section 58:10-23.11, et seq. subsequent to the issuance of this policy.

Explanation: The costs of cleanup and removal of hazardous wastes constitute a first and prior lien on the property, unless the property copromises six dwelling units or less and is used exclusively for residential purposes, pursuant to Section 58:10-23.11f.

New Mexico:

3-48-7 NMSA 1978; 69-25B-8 NMSA 1978

North Dakota:

N.D. Cent. Code Sec. 38-14.2-14 (Liens for reclamation on private lands.)


Ohio Rev. Code Ann. §3767.41; §§3734.122, 3734.20, and 3734.22 (applicable only if not a single family residence; may be deleted if improved single family residence)

Explanation: Section 3734.20 provides that the costs of abatement or prevention of air or water pollution or soil contamination so recorded are a lien against the site of the facility. Under Section 3734.22, the unreimbursed costs of cleanup that are recorded constitute a lien against the property on which the facility is located. As provided in Section 3734.02 (D), Chapter 3734 does not apply to single-family residential premises.


32 P S Sec. 5101 et seq.; Pa. Stat. Ann. tit. 32, section 5116

Explanation: Section 5116 is the Pennsylvania reclamation statute for "control and elimination of stream pollution of mine drainage..." Therefore, because of the specific purpose stated for the reclamation, the Excluded Matters of the Stewart endorsement would not apply. However, this exception may be deleted or omitted if the area is not a mining region.

South Carolina:

S.C. Code Ann. Section 48-1-350

Explanation: This provision states that all penalties assessed under the Pollution Control Act constitute a lien against the property of the person.


"Tex. Health & Safety Code Sections 361.194, 342.007, 342.008; Tex. Local Gov't Code Sections 214.0015(b), (d), and (e); Tex. Local Gov't Code Section 214.001; Tex. Nat. Res. Code Section 134.150, if applicable"

Explanation: Tex. Health & Safety Code Section 361.194 provides that the costs of remediation are secured by a lien against the land and are effective against a subsequent purchaser or lienholder who knew or should have known that the land is subject to or affected by clean-up action or costs. Section 342.007 provides that the municipality has a lien for nuisance clean-up costs second only to ad valorem tax and paving liens. Sections 214.0015(b), (d) and (e), Local Government Code, authorize a municipal lien for removal or repair of substandard buildings and states that the lien is subordinate to a mortgage recorded before the repair, removal or demolition or assessment. Section 214.001 creates a municipal lien for repair, removal or demolition of a substandard building that is subordinate only to an ad valorem tax lien. Section 134.150 creates an abandoned mine reclamation lien that is second only to a property tax lien.


RCW 70.121.140


W.S.A. Chapter 292.81

Explanation: For residential property, the statutory lien would not affect a “valid prior lien” as that is defined in the statute (purchase money and second mortgages (including as refinanced). May be removed if needed as appropriate for residential property.

Should you have any further questions about the endorsement, please call the National Legal Department.

Underwriting Manual Subtopic

Environmental Concerns When Issuing ALTA Policies

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In order to issue ALTA policies (which provide some coverage regarding recorded environmental protection liens) without attaching the 8.1 endorsement you are not required to check the federal district court clerk's office for environmental liens provided that you check your local records. No additional generic exception to liens filed in the federal district court clerk's office is necessary. Please call our underwriting personnel if you are aware that the land is or was hazardous waste or superfund site. However, our policies and othe forms do not insure against environmental violations.

Underwriting Manual Subtopic

Requests For Insurance Regarding Compliance With Environmental Laws And Regulations

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Our policies do not insure compliance with environmental laws and regulations Any request for insurance regarding compliance with federal, state, or local environmental regulations must be denied.