Fannie Mae and Freddie Mac have introduced new uniform notes, security instruments and riders for use immediately, with a deadline for use of January 1, 2023.
Read the press release here and review the new documents here.
The press release touts the benefits of the updated instruments as:
Easier to use: Employ more headings and subheadings, shorter paragraphs and sentences, and more clearly defined lists.
Provide more clarity: Use plainer language and clarify the explanation of borrower and lender obligations.
Reflect industry changes: Account for the changes that the industry has experienced over time and better reflect current industry practices and systems.
Fannie and Freddie are providing an 18-month transition period to allow lenders and their vendors to prepare.
Dirt lawyers should review the new documents to determine whether changes are needed in how closing documents are explained to clients.
Reading the Advance Sheets can be hazardous to your mental health
The first three cases in the July 7 Advance Sheet of the South Carolina Supreme Court were disciplinary actions involving a litany bad acts of South Carolina attorneys. Collectively, the facts were downright depressing to lawyers who attempt to behave.
The first case* resulted in a disbarment of a lawyer who borrowed almost $100,000 from his trust account to make payroll and to cover other law firm operating expenses. The money was repaid within ten months!
The attorney attempted to correct this sorry state of affairs by reconciling his trust account, hiring a licensed CPA for all accounting and bookkeeping functions of his firm, giving the trust accounting responsibilities to another lawyer in the firm and completing Legal Ethics and Practice Program Ethics School, Trust Account School, and Advertising School. He was disbarred anyway. We have heard the moral of this story many, many times. The Supreme Court will not allow a lawyer to dip into the trust account, not even for a few months.
The second case**, also a disbarment, involved a Solicitor (prosecutor) who embezzled public funds for private use. This lawyer was indicted in 2018 by a federal grand jury on twenty-six counts of wire fraud, mail fraud, conspiracy, and theft of federal funds. He was also indicted by the State Grand Jury on three counts of misconduct in office and embezzlement of public funds. This lawyer served a year in federal prison, and his state criminal charges are still pending.
The third case*** resulted in a three-year suspension. Following a traffic stop, the lawyer was arrested and charged with four counts of possession of a controlled substance. Items located in the vehicle included a plastic bag with five suspected ecstasy pills, a plastic bag with five white pills believed to be hydrocodone pills, a plastic bag with an amount of suspected “molly” and two plastic bags containing approximately eight grams of an item suspected to be cocaine. Also located in the vehicle was a marijuana pipe containing a small amount of marijuana and a white pill bottle containing suspected marijuana. The charges were dismissed by the Solicitor’s office because of concerns regarding the legality and constitutionality of the stop and search.
The lawyer failed to notify the Commission in writing within fifteen days of her arrest and, although the charges were dismissed, the lawyer admitted the misconduct. The lawyer was also terminated as counsel in 18 bankruptcy cases by the Trustee for failure to respond to clients.
Perhaps the Supreme Court placed these three cases back-to-back in the Advance Sheet as a stark reminder to all of us of the many and diverse ways we can get into trouble. Lawyers, be smart, be careful and stay safe out there!
* In the Matter of Hopkins, South Carolina Supreme Court Opinion 28042 (July 7, 2021).
** In the Matter of Johnson, South Carolina Supreme Court Opinion 28043 (July 7, 2021).
** In the Matter of MacLean, South Carolina Supreme Court Opinion 28044 (July 7, 2021).
I hope no dirt lawyer was involved in this transaction!
Two sources, The Tampa Bay Times and The Hill, have reported on a faulty legal description resulting in the accidental sale by the town of Brooksville, Florida, of its water tower. Brooksville is a picturesque town west of Orlando and north of Tampa.
According to the reports, the purchaser, Bobby Head, sought to buy a small building with a garage at the water tower’s base for redevelopment as a gym. The building had previously been used as storage for the city. The inquiry about buying the property led to discussions among and action by city leaders declaring the building surplus and subdividing the land. The City approved the transaction at a meeting on April 19. The sales price was set at $55,000, and the closing took place on May 5.
On the day of the closing, the purchaser told city officials that he thought the legal description included more property, but the deed was signed and delivered anyway. (I think I would have taken a breath and checked out the legal description!)
Several days later, Head went to Hernando County Assessor’s office to get an address for his new business location. He was told then that the property he bought included the city’s entire water tower site.
Head agreed to sign a deed to return the water tower to the city, and that deed was recorded on May 14. Once council member said to The Tampa Bay Times that he was not happy that mistakes had been made and he also believed the city had lost needed parking.
One official joked on Facebook, “Last month we accidentally sold the water tower. What should we do today?” The newspaper reports that the redevelopment agency director resigned. The Mayor joked, according to the paper, “We just need to be darn sure this doesn’t happen again.” The papers report that the incident caused quite a community uproar, as we can all imagine.
Thankfully, the purchaser was an honorable person who returned the property within a few days. As we can all attest, not all mistakes in real estate transactions are corrected so easily. I’m sending good vibes from South Carolina and hoping no real estate lawyer was involved in preparing the legal description!
South Carolina Supreme Court protects Captain Sam’s Spit for the third time
This blog has discussed “Captain Sam’s Spit” in Kiawah Island twice before. Googling that picturesque name will reveal a treasure trove of news, opinion and case law involving the proposed development of a beautiful and extremely precarious tract of pristine beach property on South Carolina’s coast.
In the latest case*, South Carolina’s Supreme Court refers to the property as one of our state’s only three remaining pristine sandy beaches readily accessible to the general public. The other two are Hunting Island State Park and Huntington Beach State Park. I enjoy the blessing of walking the pristine beach of Huntington Beach State Park on a regular basis, so despite having a career on the periphery of real estate development, I am in favor of maintaining these three state treasures.
The South Carolina Bar’s Real Estate Intensive seminar in 2016 and 2018 included field trips to Captain Sam’s Spit, from a distance at least. Professor Josh Eagle of the University of South Carolina School of Law was an excellent tour guide, and how many opportunities do we, as dirt lawyers, have for field trips? The South Carolina Environmental Law Project, located in Pawleys Island, fights these cases. Amy Armstrong, an attorney with that entity, joined our group to explain the environmental and legal issues.
Here are greatly simplified facts. Captain Sam’s Spit encompasses approximately 170 acres of land above the mean high-water mark along the southwestern tip of Kiawah Island and is surrounded by water on three sides. The Spit is over a mile long and 1,600 feet at its widest point, but the focal point of the latest appeal is the land along the narrowest point (the “neck”), which is the isthmus of land connecting it to the remainder of Kiawah Island. The neck occurs at a deep bend in the Kiawah River where it changes direction before eventually emptying into the Atlantic Ocean via Captain Sam’s Inlet.
The neck has been migrating eastward because of the erosive forces of the Kiawah River. The “access corridor”—the buildable land between the critical area and the ocean-side setback line—has narrowed significantly in the past decade to less than thirty feet. Googling this issue will lead to active maps which show the change over time. The width of the neck is significant because the developer needs enough space to build a road. At the base of the neck is Beachwalker Park, operated by the Charleston County Parks and Recreation Commission. Our fieldtrips were conducted on that Park.
Twice before, the administrative law court (ALC), over the initial objection of DHEC, has granted permits for the construction of an extremely large erosion control device in the critical area. In both cases (citations omitted), the Supreme Court found the ALC erred. The current appeal stems from the ALC’s third approval of another structure termed “gargantuan” by the Supreme Court—a 2,380-foot steel sheet pile wall designed to combat the erosive forces carving into the sandy river shoreline in order to allow the developer to construct the road to support the development of fifty houses. The Court again reversed and, in effect, shut down the proposed development, at least temporarily. The economic interests of an increased tax base and employment opportunities do not justify eliminating the public’s use of protected tidelands, according to the Court.
The Charleston Post and Courier has reported that a lawyer for the developer will ask for a rehearing of the latest case. I wouldn’t be surprised to see the litigation continue for another decade, despite rising sea levels and increasing hurricane threats affecting the precarious property. Stay tuned for future news.
*South Carolina Coastal Conservative League v. South Carolina Department of Health andEnvironmental Control, South Carolina Supreme Court Opinion 28031 (June 2, 2021)
This post may be the first and last time this blog deals with a criminal case*, but the warning from South Carolina’s Supreme Court to Clerks of Court presents a worthy discussion for dirt lawyers.
The case involved a post conviction relief (PCR) application following a murder and attempted armed robbery conviction. The application was fraught with problems including a prison lockdown and incorrect forms. The Court said that the Clerk of Court’s ministerial duties required to Clerk to simply accept the application for filing, give it the appropriate docket number, and distribute it as required by law. Instead, the Clerk returned the application based on the statute of limitations. After chastising the Clerk, the Court granted the petition and instructed the petitioner to file his successive application within thirty days of the decision.
Omitting the citations and a significant footnote to be discussed later, here is the warning:
“We take this opportunity to remind the clerks of courts of their ministerial duty to docket filings irrespective of potential procedural flaws that may exist. It is not within the Clerk of Court’s authority to refuse to perform her duty based on her opinion that a filing lacks legal merit or is untimely. This duty is not discretionary. Unless specifically authorized by statute or a court rule, a clerk of court may not exercise any judicial power reserved for a judge. The clerk cannot, without express constitutional or statutory authority, exercise any judicial functions. This includes the prohibition of performing any action contingent on deciding a question of law. It follows that a clerk of court cannot ordinarily determine questions of law. Accordingly, a clerk of court does not have the authority to reject a filing based on ostensible or perceived failures, including whether the document is contained on the proper form. Because the clerk’s role is ministerial in this respect, the clerk shall not be concerned with the merit of the papers or with their effect and interpretation. Stated differently, a clerk of court may not reject a pleading for lack of conformity with requirements of form; only a judge may do that. In the absence of an order from a judge, clerks may not refuse to accept a notice of appeal, even if they believe that no appeal is untimely or otherwise defective. Instead, the clerk shall accept the filing, thereby permitting the court to decide any issues the parties may have with it.”
If you ever have an ROD office reject your deed, mortgage or other real estate documents, you may need to cite this case!
I had a situation early in my practice where properties had been accumulated across county lines for the development of a mall. To comply with seller and lender requirements, I had to record all the documents in a single day. Prior to cutting the recording checks, I had to apportion the documentary stamps between the two counties, which I did carefully and with much tax advice. The first county readily accepted all the documents. I was halfway home. The other county, however, rejected all the documents by jumping to a legal and tax decision about the sufficiency of the doc stamps for that county. I was in a proverbial pickle! I couldn’t un-record documents in the first county to take the time to sort out the situation. I had to convince the second county to accept the documents. Luckily, I had a good friend who was on the legal staff of the Department of Revenue. After several hours of running that friend down and explaining the situation to him in great detail, he agreed on my behalf to convince the second ROD to record the documents to allow the DOR to sort out the tax issue later. Whew! (And, by the way, my calculations turned out to be correct because I got great advice in advance.)
My position about this topic has always been that the ROD did not have the authority to decide a legal question about my documents! After this case, I believe the Supreme Court would agree.
Dirt lawyers love to tell stories about the treatment of documents in different counties. The stories go something like this…. County A will record a leaf that floats in from an open window, but County B will refuse to record a document on the flimsiest of legal technicalities.
I hope this case will help even the playing field.
One significant footnote in the case relates to real estate transactions. Referring to the rule that indicates a clerk cannot exercise judicial power unless authorized by statute, footnote 2 reads: “For example, in the context of real or personal property, section 30-9-30 authorizes a clerk of court to remove a sham document from the public records upon proper notice if the clerk reasonably believes the document to be fraudulent.”
This statute and this power could be important in cases of forged signatures and other fraud, but I still believe the ministerial official would at least need sound legal advice.
Pull this case out the next time one of your documents is rejected!
*Barnes v. The State of South Carolina, South Carolina Appellate Case No. 2020-001360 (June 3, 2021).
Real estate lawyers are the “Customers” of title insurance companies in South Carolina. In other parts of the country, title company customers are the consumers and businesses who buy and sell real estate and the lenders who loan funds to accommodate those transactions. But in South Carolina, title insurance companies sell their services to real estate lawyers.
I’ve been on both sides of title company – real estate lawyer equation, having been in private practice for about a decade and in the title insurance business almost three decades. Nothing is more important to the parties involved in real estate than protecting client funds. The scariest word to a title insurance company lawyer is “defalcation”, the misappropriation of funds by a person charged with protecting funds.
How does a title insurance company become responsible for funds in a real estate lawyer’s trust account? Title insurance companies issue Closing Protection Letters to lenders and others who seek the protection of a party with deep pockets for funds held in escrow by local lawyers. The lawyer is the title company’s agent, and the letter protects the lender if the agent fails to follow the lender’s written closing instructions or fails to protect escrow funds, and those failures result in title problems. If a lawyer vanishes with closing funds, the transaction cannot be properly completed, and the lender loses the benefit of the secured mortgage loan, typically after the lender has disbursed the funds to the closing attorney.
I was taught as a baby real estate lawyer that trust funds were sacrosanct. I was to never entertain the prospect that I could use those funds for personal purposes. I remember joking that I knew I was honest the first time I closed a $23 million transaction in the 1980’s. Later, as a baby title insurance company lawyer, I was taught that one of our main responsibilities was to help our attorney agents protect client funds. And, thankfully, almost every lawyer is absolutely committed to the process of protecting those funds.
But there are bad apples.
Harken back to 1995. Our office was contacted several times in the same week about missing closing packages, unrecorded mortgages and other mishaps revolving around closings handled by a single attorney. One call is probably an explainable and easily correctable mistake. Three or four calls indicate a genuine problem.
Calls to this attorney went unreturned. After a couple of days, it was “all hands-on deck” as our office learned that a Columbia lawyer had virtually vanished. We spent weeks in his office pouring over real estate and financial documents and months chasing down leads. Law enforcement and the Supreme Court’s Office of Disciplinary Counsel (ODC) got involved. The lawyer had disappeared, leaving an ex-wife and twin adolescent daughters in Columbia to pick up the pieces. Our office paid out almost $1 million to injured parties. In retrospect, that seems like a small sum based on later tales of woe.
This lawyer was missing for about three years. Then, he mistakenly used his real Social Security Number for a transaction in the accounting practice he had set up on the west coast and, Henry Richardson, the Disciplinary Counsel at the time, flew out west to retrieve him. He was eventually disbarred. We learned through that that he had not fled with $1 million in his pocket, as we had thought. The money had disappeared over the many years of his sloppy law practice. He fled with almost no money at all.
Why remember this case in 2021? Several news stories have been published recently about New York landlord lawyer, Mitch Kossoff, who has allegedly absconded with millions of dollars in escrow funds. (See, for example, “The curious case of the vanishing attorney” from TheRealDeal, May 12, 2021 and “Manhattan real estate lawyer Mitchell Kossoff facing N.Y. and U.S. criminal probes” from Reuters, May 26, 2021.)
I sincerely hope this lawyer turns up with the funds before innocent clients are hurt. In the meantime, clients have turned to the courts for help. One interesting case involves the lawyer’s mother, who alleges her son forged her signature to take out business loans. Counsel for the lawyer says he is not a fugitive, and that he will subject himself to the jurisdiction of the courts. This is definitely an interesting story that we’ll continue to follow.
South Carolina rarely leads the pack when it comes to innovation, and we certainly didn’t break our streak with the early passage of an electronic notarization law. When we did pass legislation, it undoubtedly wasn’t the RON (remote on-line notary) legislation we need to move into this century. Instead, we have “IPEN” legislation—in person electronic notary, a term I had never heard. Why do we need in person electronic notarization when old fashion notarization is easier?
Doing my best to put a positive spin on this idea, perhaps we have taken baby steps. Our legislature passed the South Carolina Electronic Notary Public Act on May 13, and Governor McMaster signed it into law on May 18. Our Code was amended to add Chapter 2 to Title 26. Chapter 1 was also amended.
At first blush, the new law does appear to be RON legislation, but buried deep inside is the requirement that signatory be in the notary’s presence. This provision defeats the whole purpose of RON legislation.
The last time I was at an in-person seminar with a roomful of South Carolina real estate lawyers where the topic of RON was discussed (and that seminar was pre-COVID, so it’s been awhile), several lawyers pushed a collective panic button and encouraged the group to lobby against this idea because they believed RON legislation may lead to electronic notaries, not South Carolina lawyers, supervising closings.
The new law specifically addresses that issue. Section 26-1-160 was amended to add Section 5, “Supervision of attorney”, which reads, “Nothing in this act contravenes the South Carolina law that requires a licensed South Carolina attorney to supervise a closing.” Maybe this is the baby step we need. If lawyers are assured that this provision will be included in RON legislation, they may support that legislation.
Implementing the new law we do have will not be a simple process. Our Secretary of State has significant work to do to get ready to receive applications for registration of electronic notaries. The Secretary of State must create the regulations necessary to establish standards, procedures, practices, forms and records relating to electronic signatures and seals. The regulations must create a process for “unique registration numbers” for each electronic notary. The Secretary of State must approve “vendors of technology.”
Each electronic notary must secure an electronic signature, an electronic journal, a public key certificate and an electronic seal. A form called a “Certificate of Authority for an Electronic Notarial Act” must accompany every electronic notarization. I’m not sure any of this is worth the effort unless it facilitates the implementation of true RON legislation that may be passed in the future. The earliest the new legislation can be considered is January of 2022.
South Carolina dirt lawyers: let’s get behind RON legislation with the provision requiring lawyers to continue to supervise closings. We really don’t have anything to lose, and there is much to gain!
Special thanks to Teri Callen, professor and dirt lawyer extraordinaire, who helped me figure out what is going on with this legislation!
This blog reported in early April that the Centers for Disease Control and Prevention (CDC) had extended the national moratorium on residential evictions through June 30. The U.S. District Court for the District of Columbia issued an order on May 5 vacating the moratorium, but later in the day temporarily stayed its own ruling to give the Court time to consider the merits of the arguments on both sides. The result of the stay is that the eviction moratorium remains in place for the time being.
The suit* resulting in these remarkable rulings was brought on November 30 by two trade associations, the Alabama and Georgia Associations of Realtors, and by individuals who manage rental properties. The complaint raised several statutory and constitutional challenges to the CDC order. Both parties filed motions for summary judgment. The plaintiffs’ motion was granted on the grounds that the CDC had exceeded its authority by issuing the broad moratorium. The Department of Justice filed an emergency appeal within hours.
The Court asked for a defense response this week and a reply from the government by May 16, so it is likely that a new order will be issued soon. But with the moratorium’s expiration date of June 30, a new ruling will have little, if any, effect.
In addition to the national moratorium, some state and local laws restricting evictions remain in place.
The Court’s order vacating the moratorium pointed to the unprecedented challenges for public health officials and the nation caused by the COVID-19 pandemic. The difficult policy decisions, like the decision to impose the moratorium, have real-world consequences, according to the Court. The Court stated that it is the role of the political branches, not the courts, to assess the merits of such policy decisions. The Court perceived the question before it to be very narrow: does the Public Health Service Act grant the CDC the legal authority to impost a nationwide eviction moratorium? The Court held that it does not.
*Alabama Association of Realtors v. United States Department of Health and Human Services, United States District Court for the District of Columbia, No. 20-cv-3377 (DLF).
In a March 17 case*, the South Carolina Supreme Court made a thought-provoking comment on easement law through a footnote.
As with most real estate cases involving neighbors, the facts in this case are interesting. (I should probably admit the facts may only be interesting to dirt lawyers.) Paul and Susan McLaughlin bought Lot 22 in Seabrook Island and spent the next six years meeting and negotiating to build on the lot because of the existence of a pipe and an easement they were told had been abandoned.
The backstory involves a draining pipe and easement running through the backyards of seven lots. The easement and pipe were originally owned by Seabrook Island Property Owners Association (SIPOA). Over the years, the pipe degraded and became porous such that, aside from carrying away stormwater from the road, as intended, it also drained standing water from the lots. Nearly 20 years later, SIPOA installed a new draining system for the road, rendering the old one obsolete. At a property owner’s request, SIPOA abandoned the easement, but left the porous pipe in place.
After six excruciating years, the McLaughlins received home design and location approval from SIPOA, including the right to build on a former “no-build area” occupied by the abandoned easement. They removed the pipe and built their new home.
Neighbors Richard and Eugenia Ralph owned Lot 23 and sued claiming their backyard flooding became even worse as a result of the pipe removal. The jury awarded the Ralphs $1,000 in “nominal” damages. The Court of Appeals reversed and remanded for a new trial on damages alone, and the Supreme Court reversed the Court of Appeals and reinstated the jury’s verdict.
I won’t dwell on the remainder of the opinion, which deals mostly with litigation issues, but I wanted to point dirt lawyers specifically to footnote 5.
The Ralphs claimed some sort of ownership right in the abandoned easement, which the Supreme Court did not feel the need to address. But the Supreme Court did express concern over the Court of Appeals discussion of a seminal easement case in South Carolina, Blue Ridge Realty Co. v. Williamson**.
Blue Ridge is the case we rely upon for the right of property owners who buy lots with reference to a plat to use the roads shown on that plat. Without that case, many properties would have access issues.
The Supreme Court voiced concern over the alteration of a quote from the Blue Ridge case by the Court of Appeals. The Court of Appeals quoted the case: “It is generally held that when the owner of land has it subdivided and platted into lots and (easements,) and sells and conveys the lots with referenced to the plat, he hereby dedicates said (easements) to the use of such lot owners (and) their successors in title…”
Blue Ridge actually said, “It is generally held that when the owner of land has it subdivided and platted into lots and streets and sells and conveys the lots with reference to the plat, he thereby dedicates said streets to the use of such lot owners, their successors in title, and the public. (Emphasis added by the Supreme Court in the current case.)
The Supreme Court said the scenarios presented by the current case and the Blue Ridge case were fundamentally different. Blue Ridge involved the claim of a property owner to use a public street shown on a recorded plat. In the current case, lot owners whose property contains an easement intended for the benefit of the HOA claims an ownership interest because the easement inadvertently benefits the property owner as well.
In Blue Ridge, the property owner and its successors in title were the intended beneficiaries. Here, the opposite is true. The owners of Lots 22 – 28 were never intended to benefit directly from the easement. The fact that they did so, according to the Supreme Court, was a pure accident, caused by the unexpected degradation of the pipe. In short, Blue Ridge does not stand for the proposition for which it was cited by the Court of Appeals, according to the Supreme Court.
This distinction might be significant in many of the title scenarios real estate practitioners face routinely.
Interesting indeed! I also find it interesting that the Supreme Court refers to the Blue Ridge case, as we dirt lawyers refer to it, as the Williamson case, but that’s a blog for another day.
*Ralph v. McLaughlin, South Carolina Supreme Court Opinion 28015, March 17, 2021.
Early in my legal career, I searched a title prior to contentious litigation surrounding a commercial tract in Horry County. I was eight months pregnant with my son at the time. Title examiners as old as I am will remember we used to pull huge books down from high shelves to search titles in South Carolina. I remember this project so well not because of the difficult work in my puffy condition, but because of the time it took to resolve the litigation. When we finally received the final order, my son was in the second grade.
That timing may not hold a candle to the case decided last year in The United States District Court for South Carolina surrounding a tract in Dorchester County. Dudek v. Commonwealth Land Title Insurance Company* is the culmination (I hope) of what the court calls a “long- standing and enduring legal battle” over an eight-acre tract that was divided into two parcels of six and two acres, respectively.
Summarizing the almost undisputed facts as briefly as possible, plaintiffs Stephen Dudek and Doreen Cross entered into a contract to purchase the six-acre tract in 2012. A third party, Molly Morphew, entered into a back-up contract with the sellers to purchase the property in the event the plaintiffs’ purchase fell through. Both parties ultimately sued the seller for specific performance, and the plaintiffs in this case prevailed.
Dudek and Cross purchased the property in 2017 and obtained a title insurance policy from Commonwealth. The litigation with Morphew continued with two subsequent suits, the first alleging fraud and abuse of process in the purchase, and the second seeking to enforce a contract provision setting up a water and sewer easement in favor of the two-acre tract, which by this time had been purchased by Morphew. Dudek and Cross filed a title insurance claim on the easement issue, and Commonwealth denied the claim relying on an exception for easements and the exclusion for risks created by or known to the insured prior the policy date.
I’m eliminating a lot of facts and procedural nuances that title insurance nerds like me will find fascinating, so pull the case for the long story.
The Court held Commonwealth had no duty to defend the insured property owners, relying on the fact that they knew about the easement before they closed. Simple enough, right?
The more convoluted and interesting discussion revolves around the treatment of the policy of the easement issue. The covered risk in question in the policy was that “someone has an easement on the Land”. The policy contained two exceptions, however, one for unrecorded easements and one for recorded easements. The court stated that the policy simultaneously extended and eliminated coverage for easements, rendering the policy provision meaningless and illusory.
Title insurance agents routinely add specific exceptions to title insurance policies to limit coverage. This case cautions against adding exceptions that operate to prevent all coverage from a covered risk. We will all need to be careful about this holding as time progresses.
