Effective as of February 1, 2010, the Texas Department of Insurance adopted various changes to the Title Insurance rates, rules, and forms. Many of the changes were corrections to typographical errors or references to outdated forms or revisions to become more consistent with ALTA language, but some of the changes will affect day-to-day transactions. A few are summarized below.
- New T-24.1 Non-Imputation for Mezzanine Financing Endorsement: Similar to the existing non-imputation endorsement, the T-24.1 also will act as an assignment of rights to receive payments under the applicable owner's policy. Issuance of this endorsement requires signature of both the insured under the owner's policy and the mezzanine lender. The T-24.1 will not be available until an amended Rate Rule R-31 becomes effective. The proposed premium is 5% of the Basic Rate for the associated owner's policy, with a minimum premium of $25.
- New T-25.1 Contiguity Endorsement: The most significant distinction between this endorsement and the existing T-25 Contiguity Endorsement is that the new endorsement may be issued only if the subject property is comprised of at least four parcels or irregularly shaped parcels, and it does not require that the tracts' contiguous boundaries be specifically identified. As with the T-25 endorsement, the T-25.1 may be issued only with respect to non-residential property. No rate rule has yet been proposed, but watchers anticipate that it will be the same as the premium for the T-25.
- Loan Policy Endorsement: The T-2 Loan Policy form has been modified to remove a redundant T-30 endorsement for taxes and to delete the option of deleting insuring paragraphs of certain endorsements.
- Insured Closing Letter: The form has been modified to conform with the corresponding ALTA form. The main differences are that it now protects warehouse lenders and liability under the letter terminates if written notice of claim is not received within two years after the applicable closing date.
