We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is an ALTA Policy?

By O. Wallace
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

An American Land Title Association (ALTA) policy is a title insurance policy that insures against losses that can be suffered in the transfer of title through the purchase of a property. It helps avoid and protect against land title problems such as forged deeds, unrecorded mechanic’s liens, impersonation of owner, easements, water rights, boundary line disputes, mining claims, life estates, encroachments, contested wills and other assessments and encumbrances. The most basic purpose of an ALTA policy is to guarantee that the lender has a valid lien that is enforceable.

In the early days of the United States, land was purchased and transferred between owners with the help of conveyancers. These professionals searched public documents for information relevant to the property being sold and helped record the necessary deeds. In 1876, the first title insurance company was established by a group of conveyancers based in Philadelphia in order to protect lenders against title fraud and mistakes. In 1907, the American Land Title Association was formed in an effort to make the industry more streamlined and professional, as well as safer for lenders, sellers and buyers.

An ALTA policy is required by most institutional lenders in order to protect their interests against loss. This policy is usually up to the complete amount of the loan, for the entire duration of the loan. A title company will first conduct a detailed search of a property’s title, and if it is clear, an ALTA policy will be issued. Just as a traditional insurance company won’t issue flood insurance for a house in a flood plain, an ALTA policy will not be issued for a property with obvious title issues.

Twenty-five percent of properties have title issues that must be resolved before an ALTA policy can be issued. Policies vary as to who pays for the title insurance, depending on where and to whom the policy is issued. This type of policy adheres to local and state property laws, because issues of title are usually not federally regulated. There are six types of ALTA policy: Lender’s, for the bank or institution lending the money to purchase the property; Lender’s Leasehold; Owner’s, for those purchasing the property; Owner’s Leasehold; Residential; and Construction Loan. For those selling or purchasing property, it is smart to find a title company that is a member of ALTA.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By anon36595 — On Jul 13, 2009

How do lenders handling purchases of resale properties expect us (Realtors) to have deactivated titles for mobile home in hand when the current lien holder will not release it to work on until it is paid off. Our sellers/buyers are caught in between the two lien holders with no way to satisfy either one prior to closing.

By anon28140 — On Mar 11, 2009

I have a client that is trying to purchase a foreclosed property, but the seller will not provide an ALTA policy. What is the danger to this?

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.