Title Tip: Identified Risk Endorsement

ALTA 34 – Identified Risk Endorsements

With the filing of the 2021 ALTA forms, there are now two versions of the ALTA 34 endorsement: the ALTA 34 and the ALTA 34.1. Both are the “Identified Risk” endorsement and are intended to be used when the Company is willing to insure against loss by reason of stated consequences of a specified defect, lien, or encumbrance (the “Identified Risk”), but only after modifying the Policy’s coverage for Unmarketable Title. Each of these endorsements provide a modified form of “unmarketable title” coverage against loss or damage resulting from the release of a prospective purchaser, tenant, or lender from its obligation to buy, lease, or lend as a result of the Identified Risk due to the violation of a contractual condition to deliver marketable title, but only if neither the Company nor any other title insurer will insure over the Identified Risk on the same conditions as set forth in the endorsements.

The ALTA 34-06 provides coverage against loss or damage resulting from a final order or decree enforcing an Identified Risk.

The ALTA 34.1 provides coverage against loss or damage resulting from the exercise or enforcement of an Identified Risk.

The coverage and use of the two endorsements are intended to be functionally similar, but the ALTA 34.1 more clearly delineates the distinction between the Exception raised in Schedule B and the specific consequences of that Exception for which the Company is willing to provide coverage.

Neither endorsement obligates the Company to establish the Title free of the Identified Risk or to remove or eliminate the Identified Risk.

Underwriting approval is required prior to issuance of either of the ALTA 34 endorsements.

The information contained in this document was prepared by First American Title Insurance Company (“FATICO”) for informational purposes only and does not constitute legal advice. FATICO is not a law firm and this information is not intended to be legal advice. Readers should not act upon this without seeking advice from professional advisers.

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