New revised alta energy mineral endorsements
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New & Revised ALTA Energy & Mineral Endorsements PowerPoint PPT Presentation


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New & Revised ALTA Energy & Mineral Endorsements. Land Use, Leasing, and Title Issues Panel U. of Pittsburgh School of Law Energy Law & Policy Institute 2013 Presented by: Stacie Wagner Patterson, Pennsylvania State Counsel. Unique Challenges. Energy Projects and Title insurance.

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New & Revised ALTA Energy & Mineral Endorsements

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New revised alta energy mineral endorsements

New & Revised ALTA Energy & Mineral Endorsements

Land Use, Leasing, and Title Issues Panel

U. of Pittsburgh School of Law Energy Law & Policy Institute 2013

Presented by: Stacie Wagner Patterson, Pennsylvania State Counsel


Energy projects and title insurance

Unique Challenges

Energy Projects and Title insurance


Unique challenges

Unique Challenges

  • Multiple landowners and parcels

    • Managing the parties

    • Title updates

    • Corrective actions

  • Timing issues and project costs

  • High liability and internal approval requirements


Unique challenges1

Unique Challenges

  • Underwriting Issues

    • Severable Improvements

    • Severed coal, oil, gas, mineral interests/surface entry

    • Contiguity

    • Loss

    • Encroachments

    • Various types of insured interests


Energy project series

Energy project series


Energy project endorsements valuation

Energy Project Endorsements: Valuation

  • Issued when Amount of Insurance includes the aggregate of

    • Full Value of the Land or Leasehold and/or Easement Estate AND

    • Full Value of the Severable Improvements AND

    • Full Value of Electricity Facility


New tirbop energy project endorsements

New TIRBOP Energy Project Endorsements

  • 1400 (ALTA 31) – Severable Improvements (Owner’s/Loan)

  • 1410 (ALTA 36)/1420 (ALTA 36.1) – Energy Project – Leasehold Easement (Owner’s/Loan)

  • 1430 (ALTA 36.2)/1440 (ALTA 36.3) – Energy Project – Leasehold (Owner’s/Loan)


New tirbop energy project endorsements1

New TIRBOP Energy Project Endorsements

  • 1450 (ALTA 36.4)/1460 (36.5)– Energy Project – CC&Rs – Land Under Development (Owner’s/Loan)

  • 1470/1471 (ALTA 36.6)– Energy Project – Encroachments (Owner’s Loan)


Alta 9 series

ALTa 9 Series


Background nationwide case

Background – Nationwide case

  • Nationwide Life Ins. Co. sued Commonwealth Land Title Insurance Company under the following provision of ALTA 9:

    • Any instrument referred to in Schedule B… that… provides for an option to purchase, right of first refusal, or the prior approval of a future purchaser or occupant.

  • Nationwide claimed that there existed a right of prior approval in a covenant

  • Title policy listed Declaration of Covenants as exception, but not the specific right


  • Background nationwide case1

    Background – Nationwide case

    • Court ruled in favor of Nationwide

    • Court interpreted the phrase “Any instrument” to mean that the ALTA 9 protected against anything found in a Schedule B document that contained CC&Rs, not just options to purchase, rights of first refusal or prior approval rights


    Background nationwide case2

    Background – Nationwide case

    • Industry Response to Nationwide:

      • Revise ALTA 9 series to better define coverage

      • Unbundle ALTA 9 coverage

      • Create new endorsements to ensure the selection of the right endorsements to address the particular risk of a transaction


    Prior tirbop 1030 1031 1032 alta 9 9 1 and 9 2

    Prior TIRBOP 1030, 1031 & 1032(ALTA 9, 9.1, and 9.2)

    • Contained 4 unrelated types of coverage:

      • Covenants, conditions and restrictions

      • Private rights

      • Encroachments

      • Minerals


    Revised alta 9

    Revised ALTA 9

    • 1030(ALTA 9) – Restrictions, Encroachments, Minerals (Loan)

    • 1031(ALTA 9.1) – CC&Rs Unimproved Land (Owner’s)

    • 1032(ALTA 9.2) – CC&Rs Improved Land (Owner’s)

    • 1033 (ALTA 9.6) – Private Rights (Loan)

    • 1034 (ALTA 9.7)/1035 (ALTA 9.8) – Restrictions, Encroachments, Minerals – Land Under Development (Loan/Owner’s)


    New tirbop 1030 alta 9

    New TIRBOP 1030 (ALTA 9)

    • Coverage still includes:

      • Covenants, conditions and restrictions

      • Encroachments

      • Minerals and Any Other Subsurface Substance

      • Not for future improvements (ALTA 9.7 or 1034)

    • Removed coverage for:

      • Private Rights (now contained in 1033)


    New tirbop 1030 alta 91

    New TIRBOP 1030 (ALTA 9)

    • New Carve-Outs for (inter alia):

      • Contamination

      • Explosion

      • Fire

      • Fracturing Vibration

      • Earthquake or Subsidence

      • Negligence by a person or an Entity exercising a right to extract or develop minerals or other subsurface substances


    New tirbop 1031 1032 owners only alta 9 1 9 2

    New TIRBOP 1031 & 1032 (Owners Only) (ALTA 9.1 & 9.2)

    • Coverage still includes

      • Covenants, conditions and restrictions

    • Removed coverage for:

      • Private rights

      • Encroachments (now contained in 1313)

      • Future exercise of mineral rights (now contained in 1340, 1350 & 1360)


    New tirbop 1035 alta 9 8

    New TIRBOP 1035 (ALTA 9.8)

    • Same coverage as 1031 and 1032 but extends to Future Improvements to be built according to identified plans


    Alta 35 series mineral set

    ALTa 35 Series—Mineral Set


    New tirbop 1340 1350 1360 alta 35 35 1 35 5

    New TIRBOP 1340, 1350 & 1360 (ALTA 35, 35.1 & 35.5)

    • 1340 – Enforced removal or alteration of buildings resulting from future exercise of mineral rights

    • 1350 – Enforced removal or alteration of improvements (structures on the land including paved roads, walkways, parking areas, driveways, etc., but excluding crops, landscaping, etc.) from future exercise of mineral rights

    • 1360 – same as 1350 but adds future improvements as shown on identified plans


    New tirbop 1340 1350 1360 alta 35 35 1 35 51

    New TIRBOP 1340, 1350 & 1360 (ALTA 35, 35.1 & 35.5)

    Carve-outs as mentioned re 1030 (ALTA 9) but also for:

    “the exercise of rights described in _________”


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