Standard Exceptions

1. Standard Exceptions Removing the standard exceptions on an extended policy

2. Introduction • The difference between Standard and Extended Polices • How are the Standard Exceptions Removed?

3. All Title Policies Contain Standard Exceptions • A: Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. • B: Any facts, rights, interest, or claims which are not shown by the public records but which could be ascertained by an inspection of the land or by making an inquiry of persons in possession thereof. • C: Easements, claims of easement or encumbrances which are not shown by the public records. • D: Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by public records. • E: [1] Unpatented mining claims; [2] Reservations or exceptions in patents or in acts authorizing the issuance thereof; [3] Water rights, claims or title to water; whether or not the matters excepted under [1], [2], or [3] are shown by the public records; [4] Indian Tribal Codes or Regulations, Indian Treaty or Aboriginal Rights, including easements or equitable servitudes. • F: Any line, or right to a lien, for services, labor, materials or medical assistance theretofore or hereafter furnished, imposed by law and not shown by the public records. • G: Any service, Installation, connection, maintenance, construction, tap or reimbursement charges/costs for sewer, water, garbage or electricity. • H: Defects, liens, encumbrances, adverse claims or other matters, if any, created first appearing in the public records or attaching subsequent to the effective date hereof but prior to the date the proposed insured acquires of record for value the estate or interest or mortgages thereon covered by this Commitment.

4. The Difference • Theses exceptions remain in a Standard Form Policy • In an Extended From Policy the Standard Exceptions are removed.

5. Removing Exception A • A: Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records • What is needed from the owner? • An affidavit from the owner of the property stating that there are taxes or assessments which are not shown on the public records.

6. Removing Exception B • B: Any facts, rights, interest, or claims which are not shown by the public records but which could be ascertained by an inspection of the land or by making an inquiry of persons in possession thereof. • What is needed from the owner? • An affidavit from the owner of the property that there are no other parties in possession or with the right of possession. If there are unrecorded leases, list each lease in the affidavit. • In some cases, the title company will make an inspection of the property.

7. Removing Exception C • C: Easements, claims of easement or encumbrances which are not shown by the public records. • What is needed from the owner ? • For an owner’s policy, a survey is reviewed. • For a lender’s policy, a affidavit is required stating that there are no unrecorded easements or encumbrances.

8. Removing Exception D • D: Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by public records. • What is needed from the owner? • For an owner’s policy a survey is required and reviewed. • For a lender’s policy that insures property with existing construction, an affidavit is taken. • For a lender’s policy with new construction a survey is required.

9. Removing Exception E • E: [1] Unpatented mining claims; [2] Reservations or exceptions in patents or in acts authorizing the issuance thereof; [3] Water rights, claims or title to water; whether or not the matters excepted under [1], [2], or [3] are shown by the public records; [4] Indian Tribal Codes or Regulations, Indian Treaty or Aboriginal Rights, including easements or equitable servitudes. • What is needed from the owner? • An affidavit is taken from the owner of the property.

10. Removing Exception F • F: Any lien, or right to a lien, for services, labor, materials or medical assistance theretofore or hereafter furnished, imposed by law and not shown by the public records. • What is needed from the owner? • For both an owner’s policy and a lender’s policy an affidavit is taken from the owner of the property stating that there has not been any construction on the property in the last 90 days.

11. Removing Exception G • G: Any service, Installation, connection, maintenance, construction, tap or reimbursement charges/costs for sewer, water, garbage or electricity. • What is needed from the owner? • An affidavit is taken from the owner of the property.

12. Removing Exception H • H: Defects, liens, encumbrances, adverse claims or other matters, if any, created first appearing in the public records or attaching subsequent to the effective date hereof but prior to the date the proposed insured acquires of record for value the estate or interest or mortgages thereon covered by this Commitment. • What is needed from the owner? • An affidavit is taken from the owner of the property.

13. Re-Cap • To obtain an Owner’s Extended policy, the owner must always submit in a survey. • Unless there is new construction, in most cases, a survey is not needed on a Lender’s Extended policy • There is more risk in issuing an Owner’s Extended policy than in issuing a Lender’s Extended policy. • In addition to what is required from the owner and or borrower, the title company does additional research in order to become comfortable in issuing the policies.