In the realm of title insurance, each state has its own statutes, regulations, and rules that we have to work with when issuing title insurance policies. In this article, we are going to discuss some of the unique factors we have to be cognizant of when writing title insurance in North and South Dakota.
North Dakota is a very interesting state when it comes to underwriting title insurance. We write directly in North Dakota and there are several factors that make it a unique state in terms of title:
- Mineral Rights. Out in Western North Dakota there’s an oil and gas boom so we have to address mineral rights issues when writing title insurance there. We don’t typically encounter mineral rights issues in the Twin Cities.
- Construction Mortgages. In North Dakota we don’t have to worry much about construction mortgages because if a mortgage is a construction mortgage, typically we’re going to have priority over potential mechanics liens, even if work starts before we get the mortgage recorded. This is very different from a construction mortgage transaction in Minnesota.
One of the other states in which we write title insurance directly is South Dakota. One of the significant things we have to deal with in South Dakota is the counter-signature fee.
The law in South Dakota requires that the local abstractor in the county where the property is located sign off on any title policy that’s issued in South Dakota. In order to do that, they obtain a counter signature fee that is set by statute but can sometimes be as much as 50% of the title insurance premium. So in addition to paying the title insurance premium, you’re paying another 50% on top of that to the local abstractor for the counter-signature fee. That can be hard for people to understand, but it’s a rule that’s set by state statute and not an additional fee that the title insurance company is charging.