Commitment Exceptions Removal (AC June 2024)

Have you ever found yourself training a new policy production staff member? How do you explain when the commitment exceptions can be removed from the final title policy?

For example the first exception to appear on the loan policy is: Any lien, or right to lien, for services, labor, or material heretofore or hereafter furnished, imposed by law, and not shown by the public records.

The question becomes, "Under what circumstances can this exception be removed from the policy?"

Answer: This exception can only be removed from a loan policy upon receipt of an executed owner’s/borrower’s affidavit and if there has been no mechanic’s lien suit to enforce a mechanic’s lien filed in the land records.

What about the Owner’s Policy?

For example, the survey exception reads as follows: Any discrepancies or conflicts in boundary lines or shortage in area or encroachments, and other facts which a correct survey or any inspection of the premises would disclose. NOTE AS TO OWNERS POLICY ONLY: If ALTA Homeowner's policy is chosen by purchaser, and no survey is obtained, Covered Risks 21, 22, 23, and 24 are deleted from the Owner's policy. If a standard ALTA® Owner’s policy is chosen without a survey, Covered Risk 2 (c) is deleted.

The question is, "When does the survey exception get removed from the Owner’s Policy?"

Answer: This exception must remain on the Owner’s Policy unless a) the property is a Condominium OR b) a current survey has been prepared for the purchaser which should be abstracted below OR c) the seller had a survey prepared for them and signs a survey affidavit that no changes were made since date of survey.

There are more examples from where these came from which you can find in StarsLink. If you go to this link you will not only find the new ALTA 2021 Commitment sample and the sample policies with instructions but all our updated forms sorted by subject in alphabetical order. All documents are available in PDF and in WORD format.

Please contact underwriting counsels at VAUnderwriting@OldRepublicTitle.com for specific questions regarding the Old Republic policies or forms.