CLTA v. ALTA

The CLTA policy is a widely used form of title insurance in California. It provides coverage against a range of title risks, including forged documents, undisclosed heirs, and other title defects. Key characteristics of CLTA policies include:

1- Standard Coverage: CLTA policies typically offer standard coverage, which protects against known and unknown defects that existed prior to the policy’s effective date.

2- Basic Exceptions: CLTA policies may contain standard exceptions, such as rights of parties in possession, easements, and other recorded encumbrances.

3- Limited Coverage Amount: CLTA policies have a coverage amount that is generally based on the purchase price of the property or the loan amount.

ALTA Policy

The ALTA policy is a more comprehensive form of title insurance commonly used in commercial real estate transactions. It provides broader coverage and offers additional protections beyond what is provided by the CLTA policy. Key characteristics of ALTA policies include:

1- Extended Coverage: ALTA policies offer extended coverage that goes beyond the standard coverage provided by CLTA policies. This includes coverage for certain survey and boundary issues, zoning violations, and encroachments.

2- Additional Endorsements: ALTA policies often include various endorsements that can be added to customize the coverage to the specific needs of the transaction.

3- Higher Coverage Amount: ALTA policies typically have a higher coverage amount to account for the larger financial investments in commercial properties.

Key Differences between CLTA and ALTA Policies

While both CLTA and ALTA policies provide title insurance coverage, there are notable differences between them:

1- Coverage Scope: ALTA policies generally provide broader coverage than CLTA policies, including additional protections and endorsements.

2- Cost: ALTA policies are typically more expensive than CLTA policies due to their wider coverage and endorsements.

3- Customization: ALTA policies offer more flexibility to customize coverage through various endorsements, whereas CLTA policies are more standardized.

4- Common Usage: CLTA policies are more commonly used in residential real estate transactions, while ALTA policies are frequently used in commercial real estate transactions.

It is important to consult with a knowledgeable California real estate attorney or title insurance professional to determine which policy best suits your specific needs and provides adequate protection for your real estate investment. At the Real Estate Law Corporation, our experienced attorneys can guide you through the intricacies of title insurance and help you make informed decisions to safeguard your property interests.