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This guide provides guidelines for conducting property searches and surveys for residential and commercial properties, including search requirements and exceptions.
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Search and Survey Guidelines Presented by: Douglas SmithWednesday, August 21, 2013
Streamline Search & Examination (Stewart Bulletin MI000024 dated 4/29/2005) May be used when the property is: • An improved residential lot or acreage parcel under 5 acres. • Improved commercial lot or acreage parcel under 5 acres. • Subject to a policy amount not exceeding $5 Million.
You may rely on the “starter” unless you have reason to believe that the quality of such product is suspect. (Does not include, Foreclosure Guarantees or Junior Loan Policies.) • You are not required to search behind an owner’s policy “starter” and may rely on it to have identified all the exceptions that you would need to take for matters prior to the policy date.(Note: while this is not required for owner’s policies, it is a wise procedure to look behind the date of policy for 30 years for any open mortgages.)
If your starter is a loan policy for a refinance, you must check behind the date of policy for open mortgages made by the borrower/fee owner. • If your starter is a loan policy with generic exceptions for recorded easements, recorded covenants, conditions or restrictions, and recorded mineral interests, then you must also use the generic exceptions in Schedule B BUT • If you are required by the customer to take specific exception to easements, restrictions and mineral interests (on owner’s or loan policies), you must go back and search earliest records and take specific exception to each matter. (Note: The Short Form policies contain the generic exceptions (and affirmative coverage’s) automatically.)
You may charge the $300.00 work fee for the search of the minerals but not easements and restrictions. • If the starter policy was a short form policy, it took generic exception to easements and restrictions, automatically. • You must do a search and examination from the date of the starter forward including a name search on owner/seller/borrower.
Your search and examination starts with the last recorded deed (arm’s length sale) that is accompanied by a simultaneous, institutional, purchase money mortgage (PMM) which have been recorded not less than 5 years ago. This is your point of good title. (POGT) • Should your most recent deed/PPM be less than that, then you must go back 2 deeds on a sale to a bona fide purchaser with a PPM.
You also must go behind the POGT to search for easements, and restrictions. (Note: The Michigan 40 Year Marketability Act does not affect (remove) easements and restrictions.) • If you are in a recorded Plat (subdivision) or Condominium you would search back to the recording of the Plat or Condominium for easements and restrictions.
If your property is a Government Lot or metes and bounds description, you must go back to earliest records to search for easements and restrictions. • A general name search must be made on all owner’s/recorded lessees/vendees on a sale or refinance.
You are not required to do a name search (General Index) on buyers. (Act or omission of the insured and PMM’s have priority over judgments/liens recorded against the new borrower.) • You must do a Patriot Search on all parties: both seller and buyer on a sale or on the borrower in a refinance.
Use of a starter for commercial propertiesStewart Bulletin SLS2011004 – 2/10/2011
You may begin your search and examination with an acceptable prior title policy unless you have reason to believe the prior is incomplete or inaccurate. • You may use a prior Owner’s policy with specific title exceptions to begin your search. • You may use a prior Loan policy, if it has specific title exceptions (not generic) to start your search for a new Loan policy.
You may use a prior Loan policy to issue a new Owner’s policy if it has specific exceptions but must start your search one year before the conveyance date to the prior owner or one year prior to the loan policy whichever search is longer in time. • You may use a prior Commitmentfrom a prior transaction with specific title exceptions but only if approved by a Senior Underwriter. • You may not use a commercial short form loan policy as a starter unless your new policy will contain generic exceptions.
You may not use a Foreclosure Guarantee and Commitment or a Junior Loan Policy as a starter. • You must do the normal name search, tax search and Patriot search. • You must have the starter in your possession (scan if you archive files) in order to use it as a starter.
Loan Policy: Residential • Stewart Title does not require a survey in order to give extended coverage as to survey matters on Loan Policies issued on 1-4 family residential properties. (Defined as subdivision lots or acreage tracts less than 25 acres.) • You may delete the pre-printed standard exception for survey matters or issue a survey coverage endorsement without inspection or additional requirements.
Loan Policy: Residential • You must include specific exceptions for easements of record or of any encroachments, boundary line overlaps or unrecorded easements which are known to you.
Loan Policy: Commercial • Stewart Title does not require a survey in order to give extended coverage as to survey matters on Loan Policies with liabilities up to $25 Million. • You may delete the pre-printed standard exception for survey matters or issue a survey coverage endorsement without inspection or additional requirements. • You must include specific exceptions for easements of record and of any encroachments, boundary line overlaps or unrecorded easements which are known to you.
Loan Policy: Endorsements • You may issue the ALTA Form 9-06, 9.3-06, (or the CLTA Form 100) on Loan policies covering 1-4 family residential or on Loan policies on commercial transactions of up to $25 Million without a survey, if you include specific exceptions for easements of record and of any encroachments, boundary line overlaps or unrecorded easements which are known to you.
Owner’s Policy: Residential • Stewart Title does not require a survey in order to give extended coverage as to survey matters on Owner’s policies covering 1-4 family residential property in platted subdivisions if you include specific exceptions for easements of record and of any encroachments, boundary line overlaps or unrecorded easements which are known to you. (The corollary of this is, you are required to get a survey on more than 1-4 family residential properties and on metes and bounds descriptions or Government lots.)
Owner’s Policy: Residential • Stewart Title does not require a survey on the issuance of the Homeowner’s Policy of Insurance. Please see Stewart Bulletins: MU000030 and MU000036.
Owner’s Policy: Commercial • If there is a prior survey: • Stewart Title does not require a new survey in order to provide extended coverage as to survey matters on Commercial transactions if you secure: an Owner’s Affidavit or Estoppel representing that there have been no improvements made to the subject property since the date of the Survey; you take specific exception to all matters reflected on the survey. You may issue the ALTA 9 series Endorsements as well as Contiguity or Survey Endorsements.
Owner’s Policy: Commercial • Without a prior survey: • Stewart Title does not require a survey if the transaction is under $10 Million and you secure: an Owner’s Affidavit or Estoppel; you are satisfied that the improvements are not encroaching of the property line by way of an aerial photography or inspection; major buildings are not bisected by known underground lines or easements; the land is platted or there are no property line overlaps of record; and you add specific exceptions for any matters known to you.
Current Construction • Stewart Title does require a new survey to provide survey coverage if there is current construction. • You may however, provide survey coverage on a refinance after completion or sale of the property after completion.
Thank you for attending! Questions? Douglas Smith doug.smith@stewart.com 734-469-9461
