California Title Insurance Practice

Policies and Endorsements:

• GENERAL CAUTION FOR 2021 UPDATE: The American Land Title Association (ALTA) is in the process of updating and finalizing several forms as of the date of this publication. It is imperative that counsel check the ALTA website for the latest versions at https://www.alta.org/policy-forms/. These include the following:

  • 2021 ALTA Loan Policy, scheduled to become effective July 1, 2021;

  • 2021 ALTA Owner’s Policy, scheduled to become effective July 1, 2021;

  • 2021 ALTA Commitment, scheduled to become effective July 1, 2021 (as had been noted in the previous publication, a new consolidated ALTA Commitment Form was released in 2016);

  • ALTA Closing Protection Letter—Single Transaction, which was open for public comment through March 19, 2021 (practitioners are reminded to check https://www.alta.org/policy-forms/ for the most current Closing Protection Letter);

  • ALTA Closing Protection Letter—Multiple Transactions, which was open for public comment through March 19, 2021 (practitioners are reminded to check https://www.alta.org/policy-forms/ for the most current Closing Protection Letter); and

  • Several specific ALTA endorsements and addendums, which were open for public comment through March 19, 2021. Practitioners are reminded to check https://www.alta.org/policy-forms/ for the most current endorsements and addendums.

• Previously, ALTA had published new closing protection letters for single and multiple transactions in December 2018.

• To check availability or purchase forms from the California Land Title Association (CLTA), counsel may visit https://www.clta.org/page/Publications. See §6.8.

• As was noted in the prior publication, in 2018, ALTA and CLTA made changes (mostly technical) to several other endorsements. See chart in §8A.36.

• The summary chart in §8A.36 now includes endorsement 150–06, covering loss resulting from the invalidity or unenforceability of the lien of the Insured Mortgage related to a Solar Contract as defined.

• The Letter of Instructions for Purchase and Sale in §10.15 and the Letter of Instructions for Loan in §10.17 include minor updates and clarification.

• The CLTA titles of the forms of subordination agreements listed in §15.12 have been updated to more clearly reflect the forms’ content.

ALTA/NSPS Survey Standards:

• The ALTA/NSPS (i.e., National Society for Professional Surveyors) survey standard requirements were revised effective February 23, 2021. The redlined form can be found at https://www.alta.org/policy-forms/ (currently found under “Most Requested”). See §§2.18, 4.32; chaps 5–7).

Organizational Name Change and Amendments:

What was previously known as the National Arbitration Forum (NAF) has changed its name to FORUM. Further, the FORUM Code of Procedure (COP) has been split into subtopics, e.g., Business-to-Business, Employment, and so on. FORUM also offers assistance in creating rules specifically tailored to a dispute. See chap 14.

New Legislation:

• Taxation. In 2019, the California Legislature adopted SB 196, which, among other things, added subsection (d)(4) to Rev & T C §75.11, addressing statutes of limitations on supplemental assessments, which vary based on the nature and timing of the intervening changes in assessed valuation. See §4.4.

• Homeowner Bill of Rights (HBOR) temporary update. In response to the COVID-19 pandemic, the California Legislature enacted the Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020, which expands foreclosure protections under HBOR to first lien mortgages or deeds of trust secured by tenant-occupied residential real property that contains no more than four dwelling units and meets other criteria (e.g., tenant is unable to pay rent due to hardship arising from COVID-19). See Stats 2020, ch 37 (AB 3088), amending CC §2924.15. These amendments will remain in effect until January 1, 2023. CC §2924.15(b). After that date, HBOR will again apply only to first lien mortgages and deeds of trust secured by owner-occupied residential property. See §8.18.

• Keep Californians Housed Act. The provisions of CCP §1161b were set to expire on December 31, 2019. However, these were extended by SB 18 (Keep Californians Housed Act). Tenants in possession of a month-to-month lease or periodic tenancy will continue to be entitled to 90 days’ notice before their tenancy can be terminated if a landlord loses their rental property to foreclosure. Tenants in possession under a fixed-term lease have the right of possession until the end of the lease term, and all rights survive foreclosure by the lender, except that the tenancy may be terminated on 90 days’ written notice if, for instance, the purchaser will occupy the housing unit as primary residence; the lessee is the mortgagor or the child, spouse, or parent of the mortgagor; or the lease was not the result of an arm’s-length transaction. See §8.18.

• Mortgages and deeds of trust: foreclosure. Civil Code §2924 was amended by SB 1149, relating to publication of notice of sale. See §9.7.

New Cases:

California Supreme Court:

In March 2021, the California Supreme Court held that if a title insurer charges rates without filing them with the Insurance Commissioner as required by law, a consumer can still challenge the rates as unlawful in court. Reversing the prior appellate court decision on two issues, the court held that the title insurer’s unfiled rates did not fall into any of the categories covered by Ins C §12414.26. Further, the court rejected the argument that administrative proceedings were consumers’ only redress for charged unfiled rates, finding no such exclusivity in the Insurance Code. Villanueva v Fidelity Nat’l Title Co. (Mar. 18, 2021, S252035) 2021 Cal Lexis 1914, *2. See §§3.15, 6.8, 11.45.

Chapter 6:

Regulation of insurance. Villanueva v Fidelity Nat’l Title Co. (2018) 26 CA5th 1092, rev’d (Mar. 18, 2021, S252035) 2021 Cal Lexis 1914, *2. See §§3.15, 6.8, 11.45.

Chapter 11:

• Declaratory relief. Montrose Chem. Corp. v Superior Court (2020) 9 C5th 215 reversed and remanded Montrose Chem. Corp. v Superior Court (review granted Nov. 29, 2017, S244737; superseded opinion at 14 CA5th 1306). See §11.15.

• Punitive damages. Conservatorship of O.B. (2020) 9 C5th 989, 1010 n7 (disapproving cases holding clear and convincing standard of proof “disappears” on appellate review). See §§11.35, 11.37.

Chapter 14:

• Arbitration; unconscionability. OTO, L.L.C. v Kho (2019) 8 C5th 111. See §§14.8, 14.14.

• Arbitration. Lamps Plus, Inc. v Varela (2019) 587 US ___, 139 S Ct 1407. See §14.3.

Jury Instructions:

California Civil Jury Instruction 3943 (CACI) was revised in May 2020, clarifying which instructions to use depending on which parties punitive damages are sought from. See §11.109.

Appendices:

General caution: Several ALTA forms and endorsements were in the process of undergoing revisions as of the cutoff dates. Practitioners are reminded to check for the most current forms from both CLTA and ALTA.

Appendix A: ALTA Closing Protection Letter(s). Practitioners are reminded to check for the most current letter(s), which are typically available online.

Appendix B: CLTA Interim Binder. Reprinted with permission of the CLTA. The binder has not changed substantively since its last revision in 2016, but “Form A” has been stricken from the title.

Appendix C: CLTA Preliminary Report Form (2006; Exhibit A (Rev. 2018)). Reprinted with permission of the CLTA. The preliminary report form has not changed since 2006, but this update now reflects the fact that Exhibit A to the form was revised in 2018.

Appendix D: ALTA Commitment Form. This form is available online. Practitioners are reminded to check for the most current ALTA forms at https://www.alta.org/policy-forms/.

Appendix E: ALTA Loan Policy (2006). Reprinted with permission of ALTA. The form has been reprocessed for better image quality. However, it is anticipated that the policy will be updated in July 2021, after which the 2006 form will no longer be the most current version. Please check https://www.alta.org/policy-forms/ for the most current ALTA forms.

Appendix F: ALTA Owner’s Policy (2006). Reprinted with permission of ALTA. The form has been reprocessed for better image quality. However, it is anticipated that the policy will be updated in July 2021, after which the 2006 form will no longer be the most current version. Please check https://www.alta.org/policy-forms/ for the most current ALTA forms.

Appendix G: CLTA/ALTA Homeowner’s Policy of Title Insurance. Reprinted with permission. The form has been reprocessed for better image quality.