Title Insurance Commitments and Binders: Summary of Bill passed by the 2014 Maryland General Assembly

J. Paul Rieger, Jr. of First American Title Insurance Company has provided a Summary of Select Legislation Passed by the 2014 Maryland General Assembly that is available on the Real Property Section’s web site under “Section Documents.” His summary of Chapters 318 and 319 (SB 624/HB 679) amending Insurance Art. 22-102 and 22-103 and adding 22-105 is below:

This bill, in response to 100 Investment L.P. v. Columbia Town Center Title Co., 430 Md. 197 (2013), establishes that a title insurance commitment or sample policy form in which the contingencies and conditions will be inserted: (1) is a written statement of the terms and conditions on which a title insurer is willing to issue a policy of title insurance if it accepts a premium for the policy; (2) is not a representation as to the state of title; and (3) does not constitute an abstract of title. An abstract of title is defined as a representation of the state of title to property based on a review of the records that impart constructive notice relating to title to property in the State. An “abstract of title” includes a report of title and any other written or electronically created or preserved representation of state of title to property. The bill clarifies that the rights, duties, and responsibilities applicable to the preparation or issuance of an abstract of title do not apply to the issuance of a title insurance commitment or sample policy form. The bill requires that this information be included in the written notice delivered to a buyer or the buyer’s agent or attorney in a residential, purchase money mortgage transaction and that a title insurance commitment or sample policy form contain the following statement: “This document constitutes a statement of the terms and conditions on which a title insurer is willing to issue a policy of title insurance if the title insurer accepts the premium for the policy. It is not a representation as to the state of title and does not constitute an abstract of title.”

Effective October 1, 2014 and construed to apply prospectively, only, and not to have any effect on, or application to, any abstract of title or title insurance commitment completed prior to October 1, 2014.

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One comment

  1. Interesting Read

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