N.M. Admin. Code § 13.14.5.12

Current through Register Vol. 35, No. 24, December 23, 2024

Section 13.14.5.12 - STANDARD EXCEPTIONS

A policy shall contain in schedule B the standard exceptions 1 through 7, except as otherwise provided by these rules. Said standard exceptions may be preprinted in schedule B and, when specifically authorized, may be deleted by stating, "exceptions _____________ are hereby deleted in their entirety". Standard exception 5 shall refer to "spouse of the vestee" in all owner's policies and in all situations where the vestee and insured are not the same.

A. Parties in possession - Standard exception 1: Standard exception 1 may be deleted upon satisfactory proof that there are no parties in possession of the property being insured other than those claiming rights or possession in the property through matters of public record.

B. Unrecorded easements - Standard exception 2: Standard exception 2 may be deleted if a survey of the property being insured satisfactorily shows that there are no easements or claims of easements affecting the insured property other than those shown by the public records.

C. Survey coverage - Standard exception 3: Standard exception 3 may be deleted in its entirety if the insurer considers the risk acceptable. Any additional premium required by these rules must be paid and the title insurer or its title insurance agency must be furnished with a survey of the insured property meeting the insurer's underwriting standards prior to the deletion.

D. Mechanics' and Materialmen's Lien Coverage - Standard Exception 4:

(1) In an owner's policy, standard exception 4 may be deleted in only one of two circumstances:

(a) the statutory period for filing mechanics' or materialmen's liens expires prior to the date of the policy;

(b) some or all of the improvements will be "new construction" (or recently completed), and the statutory period for the filing of said liens will not have expired; or

(c) in either circumstance the construction of all improvements on the insured property must have been fully completed and accepted by the insured owner and the appropriate additional premiums required by these rules must be paid.

(2) In a loan policy, standard exception 4 may be deleted in only one of two circumstances:

(a) if the insurer's underwriting requirements for evidence of priority have been met; or

(b) if the insurer's underwriting requirements for evidence of priority have not been met but the insurer's underwriting requirements of the risk incurred by reason of the lack of priority have been met.

(c) In either circumstance, the appropriate additional premiums as established in a title rate case shall be paid.

E. Spousal rights - Standard exception 5: Standard exception 5 may be deleted from a policy if the vestee named in such policy is not an individual.

F. Water rights - Standard exception 6: Standard exception 6 shall not be modified or deleted.

G. Taxes - Standard exception 7: Standard exception 7 may be modified as follows:

(1) To read: "Taxes for the second half of the year ______, and thereafter." Such modification shall not be made unless all taxes assessed or assessable through and including the first half of the ad valorem tax year have been paid or are being paid out of funds which are under the control of the title insurance agency or title insurer in an escrow account.

(2) To read: "Taxes for the year _______, and thereafter, not yet due or payable."

(3) If the ad valorem taxes for the first half of a year have been paid, and taxes for the second half are not yet delinquent, standard exception 7 may be modified, by adding the phrase: "not yet delinquent."

H. Gap period - Standard exception 8: Standard exception 8 shall not be included in a policy.

N.M. Admin. Code § 13.14.5.12

4-1-96; 13.14.5.12 NMAC - Rn, 13 NMAC 14.5.12, 5-15-00, Amended by New Mexico Register, Volume XXVI, Issue 24, December 30, 2015, eff. 3/1/2016, Adopted by New Mexico Register, Volume XXXI, Issue 24, December 29, 2020, eff. 1/1/2021, Amended by New Mexico Register, Volume XXXV, Issue 03, February 13, 2024, eff. 1/24/2024