Commonwealth Land Title Insurance Company Fidelity National

Transcription

Commonwealth Land
Title Insurance
Company
and
Fidelity National
Title Insurance
Company
Annual Underwriting
Seminar
February 7-8, 2014
Charleston, SC
© 2014 Commonwealth Land Title Insurance Company Fidelity National Title Insurance Company – All Rights Reserved
TABLE OF CONTENTS
Page
No.
Agenda…………………………………………………………………………………… 3, 4
Life in the ALTA Fast Lane 0-39 Endorsements per Manual ……………………..
by Joby Castine, Esq. and Gregory S. Brickle, Esq.
5 - 61
A Closer Second Look at Five Newly Decided 2013 S.C. Property Cases ……… 62 - 79
by Professor Stephen Spitz
The 2014 Economic Outlook for South Carolina:
A Statewide and Regional Perspective ………………………………………………
by Joseph C. Von Nessen, Ph.D.
80, 81
Do Your Trust Accounting Procedures Need A Tune Up? ……………………...
by Marybeth Meyers and Pamela Gilbert
82 - 84
Closing Protection Letter Claims – National Trends and State Consequences …
by Jennifer Stephens Gaytan, Esq.
85 - 89
“Detailing” Your Deeds ……………………….………………………………………..
by Cynthia Hall Ouzts, Esq.
90 - 95
Ethics Update for Real Estate Lawyers …………….……………………….………
by William O. Higgins, Esq.
96 - 127
Commonwealth Land Title Insurance Company
Fidelity National Title Insurance Company
Annual Underwriting Seminar
AGENDA
Friday, February 7, 2014
1:00
-
2:00
Registration
2:00
-
3:00
Life in the ALTA Fast Lane
0-39 Endorsements per Manual
Joby C. Castine, Esq.
Gregory S. Brickle, Esq.
Fidelity National Title Insurance Group
3:00
-
4:00
A Closer Second Look at Five Newly Decided
2013 Property Cases
Professor Stephen Spitz
Charleston School of Law
4:00
-
4:15
BREAK
4:15
-
5:00
The 2014 Economic Outlook for South Carolina:
A Statewide and Regional Perspective
Joseph C. Von Nessen, Ph.D
Darla Moore School of Business/University of South Carolina
5:00
-
5:30
Do Your Trust Accounting Procedures Need A Tune Up?
Marybeth Meyers, State Manager
Fidelity National Title Group
Pamela Gilbert, Agency Quality Assurance Administrator
5:30
- 7:00
Cocktails and Heavy Hors d’Oeuvres
3
Commonwealth Land Title Insurance Company
Fidelity National Title Insurance Company
Annual Underwriting Seminar
AGENDA
Saturday, February 8, 2014
7:30
-
9:00
Registration
7:45
-
8:45
Breakfast – Charlestonian Ballroom
9:00
- 10:15
Closing Protection Letter Claims – National Trends
and State Consequences
Jennifer Stephens Gaytan, Esq.
Fidelity National Financial
10:15 - 10:30
BREAK
10:30 - 11:00
“Detailing” Your Deeds
Cynthia Hall Ouzts, Esq.
11:00 - 12:00
Ethics Update for Real Estate Lawyers
William O. Higgins, Esq.
Adams and Reese LLP
4
Life in the ALTA
Fast Lane
0-39 Endorsements
per Manual
5
ENDORSEMENTS
ALTA 1-06 Street Assessments
ALTA 2-06 Truth in Lending
ALTA 3-06 Zoning Unimproved Land
ALTA 3.1-06 Zoning Improved Land
ALTA 3.2-06 Zoning- Land Under Dev
ALTA 4-06 Condominium
ALTA 4.1-06 Condominium
ALTA 5-06 Planned Unit Development
ALTA 5.1-06 Planned Unit Development
ALTA 6-06 Variable Rate Mortgage
ALTA 6.2 Variable Rate Mtg - Neg Am
ALTA 7-06 Manufactured Housing
ALTA 7.1-06 Manuf Housing Conv. LOAN
ALTA 7.2-06 Manuf Housing Conv. OWN
ALTA 8.1-06 Environm. Lien Residential
ALTA 8.2-06 Environm. Lien Commercial
ALTA 9-06 REM - LOAN
ALTA 9.1-06 CCR - Unimproved OWNERS
ALTA 9.2-06 CCR - Improved OWNERS
ALTA 9.3-06 CCR - LOAN
ALTA 9.6-06 Private Rights - LOAN
ALTA 9.7-06 REM - Land Under Dev LOAN
ALTA 9.8-06 REM - Land Under Dev OWN
ALTA 9.9-06 Private Rights - OWNERS
ALTA 9.10-06 REM - Current Violat. Loan
ALTA 10-06 Assignment
ALTA 10.1-06 Assignment & Date Down
ALTA 11-06 Mortgage Modification
ALTA 11.1-06 Mortgage Mod w/Subord.
ALTA 12-06 Aggregation - LOAN
ALTA 12.1-06 Aggregation - State Limits
ALTA 13-06 Leasehold OWNERS
ALTA 13.1-06 Leasehold LOAN
ALTA 14-06 Future Adv. Priority
ALTA 14.1-06 Future Advance Knowledge
ALTA 14.2-06 Future Advance - Ltr of Cred
ALTA 14.3-06 Future Adv. - Reverse Mtg
ALTA 15-06 Non-Imputation - Full Equity
ALTA 15.1-06 Non-Imputation - Add'l Insrd
ALTA 15.2-06 Non-Imputation - Partial Eq
ALTA 16-06 Mezzanine Financing
ALTA 17-06 Access and Entry
ALTA 17.1-06 Indirect Access and Entry
ALTA 17.2-06 Utility Access
ALTA 18-06 Single Tax Parcel
ALTA 18.1-06 Multiple Tax Parcel
ALTA 19-06 Contiguity - Multiple Parcels
ALTA 19.1-06 Contiguity - Single Parcel
ALTA 20-06 First Loss - Multiple Parcels
ALTA 22-06 Location
Owners
Loan
NOT APPLICABLE
X
X
X
X
X
X
X
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X
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X
X
X
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X
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X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
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X
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X
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X
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X
X 6
X
ALTA 22.1-06 Locaton and Map
ALTA 23-06 Coinsurance - Single Policy
ALTA 24-06 Doing Business
ALTA 25-06 Same as Survey
ALTA 25.1-06 Same as Portion of Survey
ALTA 26-06 Subdivision
ALTA 27-06 Usury
ALTA 28-06 Easement Damange/Enf Rem
ALTA 28.1-06 Easement Boundaries
ALTA 28.2-06 Easement Boundaries DI
ALTA 29-06 Int. Rate SWAP Dir Obligation
ALTA 29.1-06 Int. Rate SWAP Addl Int.
ALTA 29.2-06 Int. Rate SWAP DO- Def #
ALTA 29.3-06 Int. Rate SWAP Addl Int Def
ALTA 30-06 Shared Appreciation Mtg
ALTA 30.1-06 Commercial Partic. Interest
ALTA 31-06 Severable Improvements
ALTA 32-06 Construction Loan PD
ALTA 32.1-06 Const Direct Payment
ALTA 32.2-06 Const. Insured's Dir Pay
ALTA 33-06 Disbursement Endorsement
ALTA 34-06 Identified Risk Coverage
ALTA 35-06 Minerals etc - Buildings
X
X
X
X
X
X
X
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X
X
X
X
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X
ALTA 35.1-06 Minerals etc - Improvmts
X
ALTA 35.2-06 Minerals etc -Described Imp
X
ALTA 35.3-06 Minerals etc-Land Undr Dev
X
ALTA 36-06 Energy Project
ALTA 36.1-06 Energy Project
ALTA 37-06 Assignment of Rents & Lease
ALTA 38-06 Mortgage Tax
ALTA 39-06 Policy Authentication
Access by Driveway
Anti-Taint
Arbitration (Waiver of)
Assignment of Mortgage
Assignment of (Update) Mortgage
Blank
Commitment
Construction Loan Disbursement
Date Down
Easement Priority 1 (Tax Deed)
Easement Priority 2 (Tax Deed)
Easement Priority 3 (Tax Deed & Foreclos
X
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X
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X 7
X
Easement (Unlocatable)
Errors in Note
Errors In Probate (Acknowledgement)
Foundation
Indefinite Chain (Purchase)
Indefinite Chain (Refinance)
Judment Lien
Legal Description (Vague/Errors In) PURC
Legal Description (Vague/Errors In) REFI
Marketability
Mechanics Lien
Modification of Mortgage
Mortgage Affirmative Coverage
Open Estate
Option
Partial Release of Mortgage
Pro-Tanto
Restrictions Violated - No Reversion
Restrictions Violation (Reversion)
Right of First Refusal
Roll Back Tax
Setback (Building Line) Violation
Street/Road Right of Way
Tax Lien
Unadministered Estate
Zoning - Land Use
Zoning - No Ordinances
*** Effective Date January 15, 2014
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8
ALTA 3 SERIES – ZONING
 ALTA 3.0-06 (6/17/06)
 ALTA 3.1-06 (10/22/09)
 ALTA 3.2-06 (4/2/12)
9
Form:
ALTA 3-06 Zoning Endorsement (6/17/06)
Availability:
Loan and Owner's
Description:
This endorsement insures the insured that the premises have a
specific zoning classification and specifies uses allowed under that
classification.
Underwriting
Requirements:
A letter or certificate should be obtained from a local zoning
authority setting out the zoning classification of the land and the
permitted and non-permitted uses.
This endorsement may be issued on either improved or unimproved
property.
10
Zoning – Unimproved Land ALTA 3-06
Policy Number:
File Number:
Premium:
Name of Insured:
1.
$
The Company insures against loss or damage sustained by the Insured in the event that, at Date
of Policy,
a.
According to applicable zoning ordinances and amendments, the Land is not classified Zone
____________;
b.
The following use or uses are not allowed under that classification:
___________________.
2.
There shall be no liability under this endorsement based on
a.
Lack of compliance with any conditions, restrictions, or requirements contained in the zoning
ordinances and amendments, including but not limited to the failure to secure necessary
consents or authorizations as a prerequisite to the use or uses. This paragraph 2.a. does not
modify or limit the coverage provided in Covered Risk 5.
b.
The invalidity of the zoning ordinances and amendments until after a final decree of a court of
competent jurisdiction adjudicating the invalidity, the effect of which is to prohibit the use or uses.
c.
The refusal of any person to purchase, lease or lend money on the Title covered by this policy.
This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the
terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is
inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this
endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.
By:____________________________________
Authorized Officer or Agent
Dated:
Copyright 2006-2010 American Land Title Association. All rights reserved.
The use of this Form is restricted to ALTA licensees and ALTA members
in good standing as of the date of use. All other uses are prohibited.
Reprinted under license from the American Land Title Association.
11
ALTA Endorsement Form 3-06 (Zoning – Unimproved Land) (6/17/06)
Form:
ALTA 3.1-06 Zoning (Completed Structure) Endorsement (10/22/09)
Availability:
Loan and Owner's
Description:
In addition to the coverage offered under the ALTA 3-06 endorsement, the
ALTA 3.1-06 also insures against loss or damage resulting from a final
court order prohibiting the use of the land for any structure presently
located thereon or requiring a removal or alteration of the structure
because of a zoning violation. The endorsement also states that the
improvement located on the land does not violate any building restrictions,
such as area, floor space, setback lines, height or parking as provided in
the zoning classification.
Underwriting
Requirements:
This endorsement may be issued only on improved property. A letter or
certificate should be obtained from a local zoning authority setting out the
zoning classification and the permitted and non-permitted uses. It should
also state that the property is in compliance with the ordinance as it
relates to area, floor space, setback lines, height and parking. An
acceptable as-built survey will be necessary as well. You should review
the zoning authority’s findings and be confident that the zoning regulations
have been met.
12
Zoning-Completed Structure ALTA 3.1-06
Policy Number:
File Number:
Premium:
Name of Insured:
1.
2.
$
The Company insures against loss or damage sustained by the Insured in the event that, at Date of Policy,
a.
according to applicable zoning ordinances and amendments, the Land is not classified Zone ___________;
b.
the following use or uses are not allowed under that classification: ________________
c.
There shall be no liability under paragraph 1.b. if the use or uses are not allowed as the result of any lack of
compliance with any conditions, restrictions, or requirements contained in the zoning ordinances and amendments,
including but not limited to the failure to secure necessary consents or authorizations as a prerequisite to the use or
uses. This paragraph 1.c. does not modify or limit the coverage provided in Covered Risk 5.
The Company further insures against loss or damage sustained by the Insured by reason of a final decree of a court
of competent jurisdiction either prohibiting the use of the Land, with any existing structure, as specified in paragraph
1.b. or requiring the removal or alteration of the structure, because, at Date of Policy, the zoning ordinances and
amendments have been violated with respect to any of the following matters:
a.
b.
c.
d.
e.
Area, width, or depth of the Land as a building site for the structure
Floor space area of the structure
Setback of the structure from the property lines of the Land
Height of the structure, or
Number of parking spaces.
3. There shall be no liability under this endorsement based on:
a.
the invalidity of the zoning ordinances and amendments until after a final decree of a court of competent
jurisdiction adjudicating the invalidity, the effect of which is to prohibit the use or uses;
b.
the refusal of any person to purchase, lease or lend money on the Title covered by this policy.
terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is
By:____________________________________
Dated:
ALTA Endorsement Form 3.1-06 (Zoning-Completed Structure-Loan) (Revised 10/22/09)
13
Form:
ALTA 3.2 Zoning - Land Under Development Endorsement (4-2-12)
Availability:
Loan and Owner's
Description:
This endorsement extends the coverage offered under the ALTA
3.1 endorsement to property on which proposed buildings are to be
built or constructed, if the proposed building is built or constructed
according to site and elevation plans identified in the endorsement.
Underwriting
Requirements:
In addition to the requirements for issuance of zoning coverage
generally, the following additional requirement must be met: The
zoning ordinance and the site plans will have to be analyzed to
determine if there are any issues or restrictions as it relates to:
a) Area, width, or depth of the Land as a building site for the
Improvement,
b) Floor space area of the Improvement,
c) Setback of the improvement from the property lines of the
Land,
d) Height (elevation) of the Improvement, or
e) Number of parking spaces.
A zoning letter from the governmental authority should be
requested if possible or an attorney’s or architect’s opinion may be
necessary to address these issues.
14
Zoning-Land Under Development ALTA 3.2-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
1. For purposes of this endorsement:
a.
b.
“Improvement” means a building, structure, road, walkway, driveway, curb, subsurface utility or water well existing at Date of
Policy or to be built or constructed according to the Plans that is or will be located on the Land, but excluding crops,
landscaping, lawns, shrubbery, or trees.
“Plans” means those site and elevation plans made by __________________ dated ___________, last revised
_______________ designated as _________________________ consisting of ___sheets.
2. The Company insures against loss or damage sustained by the Insured in the event that, at Date of Policy
a. according to applicable zoning ordinances and amendments, the Land is not classified Zone _____________________;
b. the following use or uses are not allowed under that classification:
c. There shall be no liability under paragraph 2.b. if the use or uses are not allowed as the result of any lack of compliance with
any condition, restriction, or requirement contained in the zoning ordinances and amendments, including but not limited to the
failure to secure necessary consents or authorizations as a prerequisite to the use or uses. This paragraph 2.c. does not modify or
limit the coverage provided in Covered Risk 5.
3.
The Company further insures against loss or damage sustained by the Insured by reason of a final decree of a court of
competent jurisdiction either prohibiting the use of the Land, with any existing Improvement, as specified in paragraph 2.b. or
requiring the removal or alteration of the Improvement, because of a violation of the zoning ordinances and amendments in effect at
Date of Policy with respect to any of the following matters:
a.
b.
c.
d.
e.
Area, width, or depth of the Land as a building site for the Improvement
Floor space area of the Improvement
Setback of the Improvement from the property lines of the Land
Height of the Improvement, or
Number of parking spaces.
4. There shall be no liability under this endorsement based on:
a.
b.
the invalidity of the zoning ordinances and amendments until after a final decree of a court of competent jurisdiction
adjudicating the invalidity, the effect of which is to prohibit the use or uses;
the refusal of any person to purchase, lease or lend money on the Title covered by this policy.
This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of
the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a
provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement
controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.
By: _______________________________________
Dated:
15
ALTA Endorsement 3.2-06 (Zoning-Land Under Development-Loan) (4-2-12)
ALTA 9 SERIES – Comprehensive
LOAN POLICY ENDORSEMENTS:





ALTA 9.0-06
ALTA 9.3-06
ALTA 9.6-06
ALTA 9.7-06
ALTA 9.10-06
(4/2/12)
(4/2/12)
(4/2/13)
(4/2/12)
(4/2/13)
OWNERS POLICY ENDORSEMENTS:




ALTA 9.1-06
ALTA 9.2-06
ALTA 9.8-06
ALTA 9.9-06
16
(4/2/12)
(4/2/12)
(4/2/12)
(4/2/13)
LOAN POLICY ENDORSEMENTS
 ALTA 9.0-06 Restrictions, Encroachments, Minerals (4/2/12)
 ALTA 9.3-06 Covenants, Conditions and Restrictions(4/2/12)
 ALTA 9.6-06 Private Rights (4/2/13)
 ALTA 9.7-06 Restrictions, Encroachments, Minerals - Land
Under Development (4/2/12)
 ALTA 9.10-06 Restrictions, Encroachments, Minerals Current Violations
(4/2/13)
17
Form:
ALTA 9-06 Restrictions, Encroachments, Minerals-Loan Endorsement (42-12)
Availability:
Loan
Description:
This is a comprehensive endorsement form which provides coverage for
numerous matters including restrictions, setbacks, encroachments,
assessments, easement rights, recorded notices of violations of
environmental protection covenants, and mineral rights. This
endorsement is issued only on property with existing
improvements. For construction transactions, please see the ALTA
9.7
Restrictions,
Encroachments,
Minerals
–Land
Under
Development-Loan.
"Covenant" means a covenant condition or restriction in a document or
instrument in effect at the Date of Policy. “Improvement” means an
improvement, including any lawn, shrubbery, or trees, affixed to either the
Land or adjoining land at Date of Policy that by law constitutes real
property. Certain matters are specifically excluded from coverage in
paragraph 5 of the endorsement.
Underwriting
Requirements:
1. For anything other than insuring a 1-4 single family residential
loan, an accurate current As-Built survey must be obtained and
examined.
2. Review covenants, conditions and restrictions (CC&R's) to determine if
they contain any provisions, including but not limited to forfeiture,
reversionary or maintenance/assessment provisions, which would
adversely affect the validity, enforceability or priority of a lender's interest
either initially or prior to it taking title through foreclosure. If the CC&R’s
contain any such provisions they must be specifically subordinated to the
lien of the insured mortgage, or this endorsement may not be issued
without State Office approval.
3. A separate Exception must be taken to any of the following revealed by
the title certification based upon an examination of the Public Records
and any plats, inspection reports and affidavits:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
CC&R’s,
Violations of CC&R’s,
Easements,
Forfeiture/Reversionary provisions contained in CC&R’s,
Assessment/Maintenance provisions contained in CC&R’s,
Setback lines,
Violations of setback lines,
Encroachments onto adjoining land,
Encroachments onto easements,
Encroachments onto the insured land by Improvements on
adjoining land,
©
2007 FNTIC. All Rights Reserved.
FNTG SC ENDORSEMENT MANUAL (Revised January 2013)
Endorsements-1
18
k)
l)
Filed notices of violations of Environmental Protection
Covenants,
Outstanding mineral, oil and gas interests.
Please Note for residential transactions under 1 million: in lieu of setting
out each matter separately, it is acceptable to use a combined exception
such as the following provided that the combined exception covers each
specific matter revealed by the title certification:
R-10 (Exception, Restrictions)
Covenants, conditions, restrictions, reservations, easements, liens
for assessments, private charges, option, rights of first refusal,
rights of prior approval of future purchaser or occupant, powers of
attorney and limitations on title recorded in Book ___, at page
____.
4. This endorsement may not be issued even with an exception to
encroachments onto adjoining land unless the encroachment is minor and
it is determined that a court would not require removal of the
encroachment. Any questions should be referred to the State Office.
encroachments onto easements unless the encroachment is minor and it
is determined that that the encroachment would not interfere with the use
and maintenance of the easement. Any questions should be referred to
the State Office.
6. If there are outstanding mineral interests, confirm that the right of entry
has been waived or has otherwise expired.
7. If there is a homeowners association, confirm that any prior approvals
have been complied with and that there are no unpaid assessments.
©
Endorsements-2
19
Restrictions, Encroachments, Minerals - Loan Policy ALTA 9-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
1. The insurance provided by this endorsement is subject to the exclusions in Section 5 of this endorsement; and the
Exclusions from Coverage, the Exceptions from Coverage contained in Schedule B, and the Conditions in the policy.
2. For the purposes of this endorsement only:
a. “Covenant” means a covenant, condition, limitation or restriction in a document or instrument in effect at Date of
Policy.
b. “Improvement” means an improvement, including any lawn, shrubbery, or trees, affixed to either the Land or
adjoining land at Date of Policy that by law constitutes real property.
3. The Company insures against loss or damage sustained by the Insured by reason of:
a. A violation of a Covenant that:
i.
divests, subordinates, or extinguishes the lien of the Insured Mortgage,
ii.
results in the invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage, or
iii. causes a loss of the Insured’s Title acquired in satisfaction or partial satisfaction of the Indebtedness;
b. A violation on the Land at Date of Policy of an enforceable Covenant, unless an exception in Schedule B of the
policy identifies the violation;
c.
Enforced removal of an Improvement located on the Land as a result of a violation, at Date of Policy, of a building
setback line shown on a plat of subdivision recorded or filed in the Public Records, unless an exception in
Schedule B of the policy identifies the violation; or
d. A notice of a violation, recorded in the Public Records at Date of Policy, of an enforceable Covenant relating to
environmental protection describing any part of the Land and referring to that Covenant, but only to the extent of
the violation of the Covenant referred to in that notice, unless an exception in Schedule B of the policy identifies
the notice of the violation.
4. The Company insures against loss or damage sustained by reason of:
a. An encroachment of:
i.
an Improvement located on the Land, at Date of Policy, onto adjoining land or onto that portion of the Land
subject to an easement; or
ii.
an Improvement located on adjoining land onto the Land at Date of Policy
unless an exception in Schedule B of the policy identifies the encroachment otherwise insured against in Sections
4.a.i. or 4.a.ii.;
b. A final court order or judgment requiring the removal from any land adjoining the Land of an encroachment
identified in Schedule B; or
c.
Damage to an Improvement located on the Land, at Date of Policy:
i.
that is located on or encroaches onto that portion of the Land subject to an easement excepted in Schedule
B, which damage results from the exercise of the right to maintain the easement for the purpose for which it
was granted or reserved; or
20
ii.
resulting from the future exercise of a right to use the surface of the Land for the extraction or development of
minerals or any other subsurface substances excepted from the description of the Land or excepted in
Schedule B.
5.
This endorsement does not insure against loss or damage (and the Company will not pay costs, attorneys' fees, or
expenses) resulting from:
a. any Covenant contained in an instrument creating a lease;
b. any Covenant relating to obligations of any type to perform maintenance, repair, or remediation on the Land;
c. except as provided in Section 3.d, any Covenant relating to environmental protection of any kind or nature,
including hazardous or toxic matters, conditions, or substances;
d. contamination, explosion, fire, fracturing, vibration, earthquake or subsidence; or
e. negligence by a person or an Entity exercising a right to extract or develop minerals or other subsurface
substances.
This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and
provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of
Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of
this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of
the policy and of any prior endorsements.
By:____________________________________
Dated:
ALTA Endorsement Form 9-06 (REM-Loan Policy) (Revised 4/2/12)
21
Form:
ALTA 9.3-06 Covenants, Conditions and Restrictions-Loan Endorsement (4-2-12)
Availability:
Loan
Description:
This is a comprehensive endorsement which provides coverage over violations of CC&Rs
including a covenant relating to environmental protection liens filed of record, and enforced
removal of an improvement by reason of a set-back violation. It also provides coverage for
covenants resulting in the divestment or extinguishment of the lien of the insured mortgage or
resulting in the invalidity, unenforceability or lack of priority or loss of title of Land acquired by the
insured in satisfaction of indebtedness.
Insurance over restrictions does not include coverage relating to obligations for any type of
performance, maintenance, repair or remediation on the insured land. There is no coverage over
environmental protection liens (hazardous waste) unless notice of an alleged violation was
recorded in the Land records on the Date of Policy and is not excepted to in Schedule B.
Underwriting
Requirements:
1. Review covenants, conditions and restrictions (CC&R's) to determine if they contain any
assessments, easements, or setbacks. If so, such matters should be set out separately as
exceptions on Schedule B. For residential transactions under 1 million, it is acceptable to use the
following exception in lieu of setting out each matter separately:
Covenants, conditions, restrictions, reservations, easements, liens for assessments,
private charges, option, rights of first refusal, rights of prior approval of future purchaser
or occupant, powers of attorney and limitations on title recorded in Book ___, at page
____.
2. Review CC&R's for any provisions, including but not limited to forfeiture, reversionary or
maintenance/assessment provisions, which would adversely affect the validity, enforceability or
priority of a lender's interest either initially or prior to it taking title through foreclosure. If any such
provisions are not subordinated to the lien of the insured mortgage, this endorsement may not be
issued without State Office approval.
3. For anything other than insuring a 1-4 family residential loan, an accurate current AsBuilt survey must be obtained and examined.
4. Review survey(s), inspection reports and/or affidavits and set out as separate exceptions in
Schedule B any of the following that apply:
a)
b)
c)
d)
CC&R's,
violations of CC&R's,
violations of setbacks,
filed notices of violations of environmental protection covenants,
5. If there is a homeowners association, confirm that any prior approvals have been complied with
and that there are no unpaid assessments.
22
Covenants, Conditions and Restrictions-Loan Policy ALTA 9.3-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
1.
The insurance provided by this endorsement is subject to the exclusions in Section 4 of this endorsement; and the Exclusions from
Coverage, the Exceptions from Coverage contained in Schedule B, and the Conditions in the policy.
2.
For the purposes of this endorsement only:
3.
a.
“Covenant” means a covenant, condition, limitation or restriction in a document or instrument in effect at Date of Policy.
b.
“Improvement” means an improvement, including any lawn, shrubbery, or trees, affixed to the Land at Date of Policy that by
law constitutes real property.
The Company insures against loss or damage sustained by the Insured by reason of:
a.
4.
A violation of a Covenant that:
i.
ii.
iii.
causes a loss of the Insured’s Title acquired in satisfaction or partial satisfaction of the Indebtedness;
b.
A violation on the Land at Date of Policy of an enforceable Covenant, unless an exception in Schedule B of the policy identifies
the violation;
c.
Enforced removal of an Improvement as a result of a violation, at Date of Policy, of a building setback line shown on a plat of
subdivision recorded or filed in the Public Records, unless an exception in Schedule B of the policy identifies the violation; or
d.
A notice of a violation, recorded in the Public Records at Date of Policy, of an enforceable Covenant relating to environmental
protection describing any part of the Land and referring to that Covenant, but only to the extent of the violation of the Covenant
referred to in that notice, unless an exception in Schedule B of the policy identifies the notice of the violation.
This endorsement does not insure against loss or damage (and the Company will not pay costs, attorneys' fees, or expenses)
resulting from:
a.
any Covenant contained in an instrument creating a lease;
b.
any Covenant relating to obligations of any type to perform maintenance, repair, or remediation on the Land; or
c.
except as provided in Section 3.d, any Covenant pertaining to environmental protection of any kind or nature, including
hazardous or toxic matters, conditions, or substances.
By:____________________________________
Dated:
23
ALTA Endorsement Form 9.3-06 (Covenants, Conditions and Restrictions-Loan Policy) (Rev. 4/2/12)
Form:
ALTA 9.6-06 Private Rights-Loan Endorsement (4-2-13)
Availability:
Loan
Description:
This form addresses the existence of private rights contained in
instruments which have CC&Rs. These rights include HOA liens,
private transfer fees, options to purchase, rights of first refusal and
a right of prior approval.
The coverage provided is against loss or damage if one of the
private rights in a covenant affecting the title at the Date of Policy
results in the invalidity, unenforceability or lack of priority of the
insured mortgage or causes a loss of title acquired in satisfaction of
the indebtedness.
Insurance over covenants does not include coverage relating to
obligations for any type of performance maintenance, repair or
remediation on the insured land; coverage over environmental
protection (hazardous waste), or CCRs contained in a lease.
Underwriting
Requirements:
1. Examine all recorded instruments that contain covenants,
conditions and restrictions (CC&Rs) to determine if they contain
Private Rights which are defined as:




Option to Purchase
Right of prior approval of a future purchaser or
occupant (often found in retail developments)
Private Charge or assessment (such as home owners
or other association fees or dues).
2. The coverage may be given if: (a) there or no private rights, (b) it
is determined that there are no enforceable violations of such
private rights, (c) the rights have been lawfully waived, or (d)
exceptions for the private rights are raised as exceptions in
Schedule B AND the private rights in a instrument are excluded in
paragraph 4.d of the endorsement by including the appropriate
exception number. (If there are no private rights then the word
“NONE” should be placed in the blank at 4.d).
3. If there is a homeowner’s association, confirm that any prior
approvals have been complied with and that there are no unpaid
assessments.
24
Private Rights – Loan Policy ALTA 9.6-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
2. For purposes of this endorsement only:
a. “Covenant” means a covenant, condition, limitation or restriction in a document or instrument recorded in the
Public Records at Date of Policy.
b. “Private Right” means (i) a private charge or assessment; (ii) an option to purchase; (iii) a right of first refusal; or
(iv) a right of prior approval of a future purchaser or occupant.
3. The Company insures against loss or damage sustained by the Insured under this Loan Policy if enforcement of a
Private Right in a Covenant affecting the Title at Date of Policy (a) results in the invalidity, unenforceability or lack of
priority of the lien of the Insured Mortgage, or (b) causes a loss of the Insured’s Title acquired in satisfaction or partial
satisfaction of the Indebtedness.
4. This endorsement does not insure against loss or damage (and the Company will not pay costs, attorneys' fees, or
b. any Covenant relating to obligations of any type to perform maintenance, repair, or remediation on the Land;[or]
c.
any Covenant relating to environmental protection of any kind or nature, including hazardous or toxic matters,
conditions, or substances[; or
d. any Private Right in an instrument identified in Exception(s) ______ in Schedule B].
By:____________________________________
Dated:
25
ALTA Endorsement Form 9.6-06 (Private Rights-Loan Policy) (4/2/13)
Form:
ALTA 9.7-06 Restrictions, Encroachments,
Development–Loan Endorsement (4-2-12)
Minerals-Land
Under
Availability:
Loan
Description:
This is a comprehensive endorsement form which provides coverage on
projects under development for numerous matters including restrictions,
setbacks, encroachments, assessments, easement rights, recorded
notices of violations of environmental protection covenants, and mineral
rights. This endorsement may be issued on property under
development.
Since this endorsement provides certain coverage for existing
improvements and future improvements it contains a definition of both
“Improvements” (existing at Policy date) and “Future Improvements”
(those constructed or affixed according to “Plans”). A description of the
Plans must be inserted in § 2.d of the endorsement form.
Certain matters are specifically excluded from coverage in paragraph 5 of
the endorsement.
Underwriting
Requirements:
1. For anything other than insuring a 1-4 family residential loan, an
accurate current survey must be obtained and examined. In
addition, for all transactions, satisfactory building site plans are
required for coverage.
contain any such provisions they must be specifically subordinated to the
lien of the insured mortgage, or this endorsement may not be issued
without State Office approval.
and any plats (including Building Site Plans), inspection reports and
affidavits:
a)
b)
c)
d)
e)
f)
g)
h)
i)
CC&R’s,
Violations of CC&R’s, *
Easements,
Setback lines,
Violations of setback lines, *
Encroachments onto adjoining land, *
Encroachments onto easements, *
26
j)
k)
l)
adjoining land, *
Covenants,
*Improvements and Future Improvements
out each matter separately, it is permissable to use a combined exception
____.
encroachments by existing or future improvements onto easements
unless the encroachment is minor and it is determined that that the
encroachment would not interfere with the use and maintenance of the
easement. Any questions should be referred to the State Office.
27
Restrictions, Encroachments, Minerals –Land Under Development- Loan ALTA 9.7-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
1.
The insurance provided by this endorsement is subject to the exclusions in Section 5 of this endorsement; and
the Exclusions from Coverage, the Exceptions from Coverage contained in Schedule B, and the Conditions in
the policy.
2.
For purposes of this endorsement only:
3.
a.
“Covenant” means a covenant, condition, limitation or restriction in a document or instrument in effect at
Date of Policy.
b.
“Future Improvement” means a building, structure, road, walkway, driveway, curb, lawn, shrubbery or trees
to be constructed on or affixed to the Land in the locations according to the Plans and that by law will
constitute real property.
c.
“Improvement” means an improvement, including any lawn, shrubbery, or trees, affixed to either the Land or
adjoining land at Date of Policy that by law constitutes real property.
d.
“Plans” means the survey, site and elevation plans or other depictions or drawings prepared by
_______________________ dated ________________, last revised ___________, designated as
_____________ consisting of ___ sheets.
a.
4.
A violation of a Covenant that:
i.
ii.
iii.
causes a loss of the Insured’s Title acquired in satisfaction or partial satisfaction of the Indebtedness;
b.
A violation of an enforceable Covenant by an Improvement on the Land at Date of Policy or by a Future
Improvement, unless an exception in Schedule B of the policy identifies the violation;
c.
Enforced removal of an Improvement located on the Land or of a Future Improvement as a result of a
violation of a building setback line shown on a plat of subdivision recorded or filed in the Public Records at
Date of Policy, unless an exception in Schedule B of the policy identifies the violation; or
d.
A notice of a violation, recorded in the Public Records at Date of Policy, of an enforceable Covenant relating
to environmental protection describing any part of the Land and referring to that Covenant, but only to the
extent of the violation of the Covenant referred to in that notice, unless an exception in Schedule B of the
policy identifies the notice of the violation.
The Company insures against loss or damage sustained by reason of:
a.
An encroachment of:
i.
an Improvement located on the Land at Date of Policy or a Future Improvement, onto adjoining land or
onto that portion of the Land subject to an easement; or
ii.
an Improvement located on adjoining land onto the Land at Date of Policy,
unless an exception in Schedule B of the policy identifies the encroachment otherwise insured against in
Sections 4.a.i. or 4.a.ii.;
28
b.
5.
Damage to an Improvement located on the Land at Date of Policy or a Future Improvement:
i.
that encroaches onto that portion of the Land subject to an easement excepted in Schedule B, which
damage results from the exercise of the right to maintain the easement for the purpose for which it was
granted or reserved; or
ii.
resulting from the future exercise of a right to use the surface of the Land for the extraction or
development of minerals or any other subsurface substances excepted from the description of the Land
or excepted in Schedule B.
This endorsement does not insure against loss or damage (and the Company will not pay costs, attorneys' fees,
or expenses) resulting from:
b. any Covenant relating to obligations of any type to perform maintenance, repair, or remediation on the
Land;
c. except as provided in Section 3.d, any Covenant relating to environmental protection of any kind or nature,
including hazardous or toxic matters, conditions, or substances;
d. contamination, explosion, fire, vibration, fracturing, earthquake or subsidence; or
e. negligence by a person or an Entity exercising a right to extract or develop minerals or other subsurface
substances.
This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any
of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of
Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous
endorsement is inconsistent with an express provision of this endorsement, this endorsement controls.
Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior
endorsements.
By:____________________________________
Dated:
29
ALTA Endorsement Form 9.7-06 (Restrictions, Encroachments, Minerals-Land Under Development-Loan) (4/2/12)
Form:
ALTA 9.10-06 Restrictions, Encroachments, Minerals-Loan Endorsement
(4-2-13)
Availability:
Loan
Description:
This is a comprehensive endorsement form which provides coverage for
numerous matters including restrictions, setbacks, encroachments,
assessments, easement rights, recorded notices of violations of
environmental protection covenants, and mineral rights. This
endorsement is issued only on property with existing
improvements.
"Covenant" means a covenant condition or restriction in a document or
instrument in effect at the Date of Policy. “Improvement” means an
improvement, including any lawn, shrubbery, or trees, affixed to either the
Land or adjoining land at Date of Policy that by law constitutes real
property. Certain matters are specifically excluded from coverage in
paragraph 5 of the endorsement.
This endorsement differs from the ALTA 9-06 only in paragraph 3.a. It
limits the coverage of covenants to those violations that occur on or
before the Date of Policy. Under the ALTA 9-06 no coverage can be given
if there are forfeiture/reversionary provisions or assessment/maintenance
provisions unless such provisions are specifically subordinated to the lien
of the insured mortgage. Under the ALTA 9.10-06 coverage can be given
even if the CC&R’s contain such unsubordinated provisions provided that
there are no violations thereof on the date of policy.
Underwriting
Requirements:
1. For anything other than insuring a 1-4 family residential loan, an
accurate current As-Built survey must be obtained and examined.
contain any such provisions this endorsement may still be issued as long
as there are no current violations on the Date of Policy.
and any plats, inspection reports and affidavits:
a)
b)
c)
d)
e)
f)
g)
CC&R’s,
Violations of CC&R’s,
Easements,
Setback lines,
Violations of setback lines,
©
Endorsements-1
30
h)
i)
j)
k)
l)
Encroachments onto adjoining land,
Encroachments onto easements,
adjoining land,
Covenants,
out each matter separately, it is acceptable to use a combined exception
____.
encroachments onto adjoining land unless the encroachment is minor and
it is determined that a court would not require removal of the
encroachment. Any questions should be referred to the State Office.
encroachments onto easements unless the encroachment is minor and it
is determined that that the encroachment would not interfere with the use
and maintenance of the easement. Any questions should be referred to
the State Office.
8. If there are current violations on or before the Date of Policy, then
this endorsement may not be issued [unless the State Office
determines that it would be unlikely a state court would find that a
reversion of title has occurred by reason of a particular violation].
©
Endorsements-2
31
Restrictions, Encroachments, Minerals –Current Violations- Loan ALTA 9.10-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
1. The insurance provided by this endorsement is subject to the exclusions in Section 5 of this
endorsement; and the Exclusions from Coverage, the Exceptions from Coverage contained in
Schedule B, and the Conditions in the policy.
a. “Covenant” means a covenant, condition, limitation or restriction in a document or instrument in
effect at Date of Policy.
b. “Improvement” means an improvement, including any lawn, shrubbery, or trees, affixed to either
the Land or adjoining land at Date of Policy that by law constitutes real property.
a. A violation at Date of Policy of a Covenant that:
i.
ii.
results in the invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage,
or
iii. causes a loss of the Insured’s Title acquired in satisfaction or partial satisfaction of the
Indebtedness;
b. A violation on the Land at Date of Policy of an enforceable Covenant, unless an exception in
Schedule B of the policy identifies the violation;
c.
Enforced removal of an Improvement located on the Land as a result of a violation, at Date of
Policy, of a building setback line shown on a plat of subdivision recorded or filed in the Public
Records, unless an exception in Schedule B of the policy identifies the violation; or
d. A notice of a violation, recorded in the Public Records at Date of Policy, of an enforceable
Covenant relating to environmental protection describing any part of the Land and referring to that
Covenant, but only to the extent of the violation of the Covenant referred to in that notice, unless
an exception in Schedule B of the policy identifies the notice of the violation.
4. The Company insures against loss or damage sustained by reason of:
a. An encroachment of:
i.
an Improvement located on the Land, at Date of Policy, onto adjoining land or onto that
portion of the Land subject to an easement; or
ii.
an Improvement located on adjoining land onto the Land at Date of Policy
unless an exception in Schedule B of the policy identifies the encroachment otherwise insured
against in Sections 4.a.i. or 4.a.ii.;
32
b. A final court order or judgment requiring the removal from any land adjoining the Land of an
encroachment identified in Schedule B; or
c.
Damage to an Improvement located on the Land, at Date of Policy:
i.
that is located on or encroaches onto that portion of the Land subject to an easement
excepted in Schedule B, which damage results from the exercise of the right to maintain the
easement for the purpose for which it was granted or reserved; or
ii.
resulting from the future exercise of a right to use the surface of the Land for the extraction or
development of minerals or any other subsurface substances excepted from the description
of the Land or excepted in Schedule B.
5. This endorsement does not insure against loss or damage (and the Company will not pay costs,
attorneys' fees, or expenses) resulting from:
b. any Covenant relating to obligations of any type to perform maintenance, repair, or remediation
on the Land;
c.
except as provided in Section 3.d, any Covenant relating to environmental protection of any kind
or nature, including hazardous or toxic matters, conditions, or substances;
d. contamination, explosion, fire, fracturing, vibration, earthquake or subsidence; or
e. negligence by a person or an Entity exercising a right to extract or develop minerals or other
subsurface substances.
This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any
of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of
Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous
endorsement is inconsistent with an express provision of this endorsement, this endorsement controls.
Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior
endorsements.
By:____________________________________
Dated:
Copyright 2013 American Land Title Association. All rights reserved.
33
ALTA Endorsement Form 9.10-06 (Restrictions, Encroachments, Minerals-Current Violations-Loan) (4/2/13)
OWNERS POLICY ENDORSEMENTS
 ALTA 9.1-06 Covenants, Conditions and Restrictions –
Unimproved Land(4/2/12)
 ALTA 9.2-06 Covenants, Conditions and Restrictions Improved Land (4/2/12)
 ALTA 9.8-06 REM Land Under Development
 ALTA 9.9-06 Private Rights (4/2/13)
34
(4/2/12)
Form:
ALTA 9.1-06 Covenants, Conditions and Restrictions -Owner's
Policy - Unimproved Land Endorsement (4/2/12)
Availability:
Owner's
Description:
This endorsement provides coverage for violations of restrictions,
including covenants relating to environmental liens filed in the
public records.
The words "covenants, conditions and restrictions "does not include
provisions in a "lease" or any CCR provisions relating to
maintenance, repair or remediation on the land insured or to
environmental protection except as noted above.
Underwriting
Requirements:
This endorsement may be issued only on unimproved land if the
following are complied with:
1.
An accurate and current survey must be obtained and
examined and reflected in the policy.
2.
Review covenants, conditions and restrictions (CC&R's) to
determine if they contain any easements or assessments. If
so, they should be set out separately on Schedule B.
3.
The covenants should be reviewed for reverter provisions
and violations as well. Please call the State Office if CC&R’s
contain reverter/forfeiture provisions.
4.
All enforceable violations that have been disclosed by
inspections, survey, or other means must be identified and
excepted by description of such matter in Schedule B.
5.
If there is a homeowners association, confirm that any prior
approvals have been complied with and that all assessments
have been paid.
6.
All notices of violations of CC&R’s relating to environmental
protection recorded or filed in the public records must be
identified and excepted in Schedule B.
35
Covenants, Conditions and Restrictions -Unimproved Land- Owner’s Policy ALTA 9.1-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
1.
2.
For the purposes of this endorsement only, “Covenant” means a covenant, condition, limitation or restriction in a document or
instrument in effect at Date of Policy.
3.
4.
a.
the violation; or
b.
resulting from:
a.
b.
c.
except as provided in Section 3.b, any Covenant relating to environmental protection of any kind or nature, including
By:____________________________________
Dated:
36
ALTA Endorsement Form 9.1-06 (Covenants, Conditions and Restrictions-Unimproved Land-Owner’s Policy) (Rev. 4/2/12)
Form:
ALTA 9.2-06 Covenants, Conditions and Restrictions-Owner's Policy - Improved
Land Endorsement (4/2/12)
Availability:
Owner's
Description:
This endorsement provides coverage for violations of CC&R's including notices
of violations of covenants relating to environmental liens filed in the public record.
It also provides coverage over enforced removal of improvements by reason of a
building set-back line.
For purposes of the endorsement “Improvement” means a building, structure
located on the surface of the Land, road, walkway, driveway, or curb affixed to
the land at Date of Policy and that by law constitutes real property, but excluding
any crops, landscaping, lawn, shrubbery or trees.
The words "covenants, conditions and restrictions" do not include provisions in a
"lease" or any CCR provisions relating to obligations to perform maintenance,
repair or remediation on the land insured or relating to environmental protection
except as noted above.
Underwriting
Requirements:
This endorsement may be issued only on improved land if the following are
complied with:
1.
An accurate and current survey must be obtained and examined and
reflected in the policy.
2.
Review covenants, conditions and restrictions (CC&R's) to determine if
they contain any easements or assessments. If so, they should be set out
separately on Schedule B.
3.
The covenants should be reviewed for reverter provisions and violations
as well. Please call the State Office if CC&R’s contain reverter/forfeiture
provisions.
4.
All enforceable violations that have been disclosed by inspections, survey,
or other means must be identified and excepted by description of such
matter in Schedule B.
5.
If there is a homeowners association, confirm that any prior approvals
have been complied with and that all assessments have been paid.
6.
All notices of violations of CC&R’s relating to environmental protection
recorded or filed in the public records must be identified and excepted in
Schedule B.
7.
All enforceable violations of building setback lines that have been
disclosed by inspection, survey or other means are identified and
excepted in Schedule B.
37
Covenants, Conditions and Restrictions - Owner's Policy-Improved Land ALTA 9.2-06
Policy Number:
File Number:
Premium:
$
Name of Insured:
1.
2.
For the purposes of this endorsement only,
3.
4.
a.
b.
“Improvement” means a building, structure located on the surface of the Land, road, walkway, driveway, or curb, affixed to the
Land at Date of Policy and that by law constitutes real property, but excluding any crops, landscaping, lawn, shrubbery, or
trees.
a.
the violation;
b.
Enforced removal of an Improvement as a result of a violation, at Date of Policy, of a building setback line shown on a plat of
subdivision recorded or filed in the Public Records, unless an exception in Schedule B of the policy identifies the violation; or
c.
resulting from:
a.
b.
c.
except as provided in Section 3.c., any Covenant relating to environmental protection of any kind or nature, including
By:____________________________________
Dated:
38
ALTA Endorsement Form 9.2-06 (Covenants, Conditions, and Restrictions – Owner’s Policy-Improved Land) (4/2/12)
Form:
ALTA 9.4-06 Restrictions, Encroachments, Minerals; Owner'sUnimproved Land Endorsement
Availability:
Owner's Unimproved Land
Description:
This endorsement has been withdrawn.
Underwriting
Requirements:
Not applicable.
39
Form:
ALTA 9.5-06 Restrictions, Encroachments, Minerals; Owner'sImproved Land Endorsement
Availability:
Withdrawn-not available
Description:
This endorsement has been withdrawn.
Underwriting
Requirements:
Not applicable
40
Form:
ALTA 9.8-06 Restrictions, Encroachments, Minerals-Land Under Development–Owner’s
Endorsement (4-2-12)
Availability:
Owner’s
Description:
This endorsement affords insurance coverages for owners on projects under
development.
This endorsement contains a definition of both “Improvements” (existing at Policy date)
and “Future Improvements” (those constructed or affixed according to “Plans”). A
description of the Plans must be set out in § 2.d. The endorsement provides coverage
for violations by an Improvement or Future Improvement unless shown in schedule B. It
also adds coverage for enforced removal as a result of a building set-back violation by
an improvement or future improvement not shown as an exception on Schedule B. It
also includes coverage for loss occasioned by a recorded notice of a covenant relating
to environmental protection if not excepted to in Schedule B.
The endorsement does not provide any coverage for loss resulting from CC&Rs
contained in a lease; any obligation to perform maintenance; any covenant pertaining to
environmental damage or contamination except as set out above; negligence by a
person or entity exercising the right to extract subsurface substances; or contamination,
explosion, fire, vibration, fracturing, earthquake or subsidence.
Underwriting
Requirements:
This endorsement may be issued only on unimproved land if the following are complied
with:
1.
An accurate current survey must be obtained and examined. In addition, for
all transactions, satisfactory building site plans are required for coverage.
2.
Review covenants, conditions and restrictions (CC&R's) to determine if they
contain any easements or assessments. If so, they should be set out separately
on Schedule B.
3.
The covenants should be reviewed for reverter provisions and violations as well.
Please call the State Office if CC&R’s contain reverter/forfeiture provisions.
4.
All enforceable violations that have been disclosed by inspections, survey, or
other means must be identified and excepted by description of such matter in
Schedule B.
5.
If there is a homeowners association, confirm that any prior approvals have been
complied with and that all assessments have been paid.
6.
All notices of violations of CC&R’s relating to environmental protection recorded
or filed in the public records must be identified and excepted in Schedule B.
7.
All enforceable violations of building setback lines that have been disclosed by
inspection, survey or other means are identified and excepted in Schedule B.
41
Covenants, Conditions and Restrictions-Land Under Development-Owners Policy ALTA 9.8-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
1.
2.
3.
4.
a.
b.
“Future Improvement” means a building, structure, road, walkway, driveway, curb to be constructed on or affixed to the Land in
the locations according to the Plans and that by law will constitute real property, but excluding any crops, landscaping, lawn,
shrubbery, or trees.
c.
“Improvement” means a building, structure located on the surface of the Land, road, walkway, driveway, or curb, affixed to the
Land at Date of Policy and that by law constitutes real property, but excluding any crops, landscaping, lawn, shrubbery, or
trees.
d.
“Plans” means the survey, site and elevation plans or other depictions or drawings prepared by ____________________
dated ______________, last revised ______________ designated as ___________________ consisting of ___ sheets.
a.
A violation of an enforceable Covenant by an Improvement on the Land at Date of Policy or by a Future Improvement, unless
an exception in Schedule B of the policy identifies the violation;
b.
Enforced removal of an Improvement located on the Land or of a Future Improvement as a result of a violation of a building
setback line shown on a plat of subdivision recorded or filed in the Public Records at Date of Policy, unless an exception in
Schedule B of the policy identifies the violation; or
c.
resulting from:
a.
b.
c.
except as provided in Section 3.c, any Covenant relating to environmental protection of any kind or nature, including
By:____________________________________
Dated:
42
ALTA Endorsement Form 9.8-06 (CC&R’s-Land Under Development-Owner’s Policy) (4/2/12)
Form:
ALTA 9.9-06 Private Rights-Owners Endorsement (4-2-13)
Availability:
Owner’s
Description:
This form addresses the existence of private rights contained in
instruments which have CC&Rs. These rights include options to
purchase, rights of first refusal and a right of prior approval. The
owners form does not give coverage for “private charges or
assessments” as does the ALTA 9.6-06 Loan.
The coverage provided is against loss or damage if one of the
private rights in a covenant affecting the title at the Date of Policy
causes a loss of the Insured’s title.
Insurance over covenants does not include coverage relating to
obligations of any type to perform maintenance,
repair or
remediation on the insured land; coverage over environmental
protection (hazardous waste), or CCRs contained in a lease.
Underwriting
Requirements:
1. Examine all recorded instruments that contain covenants,
conditions and restrictions (CC&Rs) to determine if they contain
Private Rights which are defined as:



Option to Purchase
Right of prior approval of a future purchaser or
occupant (often found in retail developments)
2. The coverage may be given if: (a) there or no private rights, (b) it
is determined that there are no enforceable violations of such
private rights, (c) the rights have been lawfully waived, or (d)
exceptions for the private rights are raised as exceptions in
Schedule B AND the private rights in a instrument are excluded in
paragraph 4.d of the endorsement by including the appropriate
exception number. (If there are no private rights then the word
“NONE” should be placed in the blank at 4.d).
43
Private Rights – Owner’s Policy ALTA 9.9-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
a. “Covenant” means a covenant, condition, limitation or restriction in a document or instrument recorded in the
Public Records at Date of Policy.
b. “Private Right” means (i) an option to purchase; (ii) a right of first refusal; or (iii) a right of prior approval of a future
purchaser or occupant.
3. The Company insures against loss or damage sustained by the Insured under this Owner’s Policy if enforcement of a
Private Right in a Covenant affecting the Title at Date of Policy based on a transfer of Title on or before Date of Policy
causes a loss of the Insured’s Title.
4. This endorsement does not insure against loss or damage (and the Company will not pay costs, attorneys' fees, or
b. any Covenant relating to obligations of any type to perform maintenance, repair, or remediation on the Land;
c. any Covenant relating to environmental protection of any kind or nature, including hazardous or toxic matters,
conditions, or substances; or
d. any Private Right in an instrument identified in Exception(s) ______ in Schedule B.
By:____________________________________
Dated:
44
ALTA Endorsement Form 9.9-06 (Private Rights-Owner’s Policy) (4/2/13)
ALTA 28 SERIES – Easements
Encroachments
 ALTA 28.0-06 Easement – Damage or Enforced Removal
(2/3/10)
 ALTA 28.1-06 Encroachments – Boundaries and Easements
(4/2/12)
 ALTA 28.2-06 Encroachments – Boundaries and EasementsDescribed Improvements (4/2/13)
45
Form:
ALTA 28-06 Easement Damage or Enforced Removal
Endorsement (2/03/10)
Availability:
Loan and Owners
Description:
This endorsement insures lenders against loss or damage caused
by the encroachment of an existing building located on the Land
onto or over an easement shown as an exception in Schedule B.
Underwriting
Requirements:
Factors to be considered in the issuance of this endorsement are;
(1) the type of easement (overhead, underground), (2) the size of
the encroachment (de minimis or substantial), (3) how long the
building has been in place, (4) whether the easement can still be
used with the encroachment, and (5) the cost of moving either the
building or the easement.
If the encroachment is de minimus this endorsement may usually
be issued.
The endorsement only covers “existing buildings” and not other
improvements on the Land. Any request to expand this coverage
must be approved by the State Office.
46
Easement – Damage or Enforced Removal ALTA 28-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
The Company insures against loss or damage sustained by the Insured if the exercise of the granted or
reserved rights to use or maintain the easement(s) referred to in Exception(s) __________ of Schedule B
results in:
(1) damage to an existing building located on the Land, or
(2) enforced removal or alteration of an existing building located on the Land.
terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv)
increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is
By: _______________________________________
Dated:
47
ALTA Endorsement 28-06 (Easement – Damage or Enforced Removal) (Revised 02-03-10)
Form:
ALTA 28.1-06 Encroachments-Boundaries and Easements (4/02/12)
Availability:
Loan and Owners
Description:
This endorsement insures lenders against loss with respect to certain boundary
and easement encroachments formerly covered in the ALTA 9 series.
For purposes of the endorsement an “improvement’ is defined to be an existing
building located either on the Land or adjoining land at date of policy that by law
constitutes real property. It provides coverage for loss by reason of an
encroachment of an improvement appurtenant to the Land onto neighboring
property or onto an easement; as well as insuring against an encroachment from
a neighboring land onto the Land unless excepted in Schedule B. It also insures
against enforced removal of an insured improvement which encroaches onto
neighboring property or onto an easement.
Underwriting
Requirements:
1. An accurate current survey of the Land is required to provide coverage
on any policy other than a 1-4 family residential Loan Policy.
2. Coverage 3.a. may be given for encroachments onto adjoining land if any such
encroachments are excepted to in Schedule B. For encroachments onto
easements the coverage may be given if: (1) there are no easements excepted in
Schedule B; or (b) encroachments onto easements are expressly excepted in
Schedule B.
3. Coverage 3.b may be provided for encroachments onto the Land from a
neighboring improvement if the encroachment is expressly excepted in Schedule
B.
4. Coverage 3.c may be given if any of the following situations apply: (a) there
are no encroachments onto easements excepted in Schedule B; (b) the
encroachment is minor and could be removed at minimal cost; or (c) the
encroachment is minor and State Counsel is satisfied that a state court would not
require its removal.
5. Coverage 3.d. may be given if any of the following situations apply:(a) there
are no encroachments onto adjoining land excepted in Schedule B; (b) the
encroachment is minor and could be removed at minimal cost; or (c) the
encroachment is minor; is not onto a parcel of vacant land; is not necessary to
support the main structure and State Counsel is satisfied that a state court would
not require its removal.
6. Paragraph 4 allows for exclusion of any specific encroachment set forth in
Schedule B.
48
Encroachments-Boundaries and Easements ALTA 28.1-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
1.
The insurance provided by this endorsement is subject to the exclusions in Section 4 of this endorsement; and the
Exclusions from Coverage, the Exceptions from Coverage contained in Schedule B, and the Conditions in the
policy.
2.
For purposes of this endorsement only, “Improvement” means an existing building, located on either the Land or
adjoining land at Date of Policy and that by law constitutes real property.
3.
a.
An encroachment of any Improvement located on the Land onto adjoining land or onto that portion of the
Land subject to an easement, unless an exception in Schedule B of the policy identifies the encroachment;
b.
An encroachment of any Improvement located on adjoining land onto the Land at Date of Policy, unless an
exception in Schedule B of the policy identifies the encroachment;
c.
Enforced removal of any Improvement located on the Land as a result of an encroachment by the
Improvement onto any portion of the Land subject to any easement, in the event that the owners of the easement
shall, for the purpose of exercising the right of use or maintenance of the easement, compel removal or relocation of
the encroaching Improvement; or
d.
4.
Enforced removal of any Improvement located on the Land that encroaches onto adjoining land.
This endorsement does not insure against loss or damage (and the Company will not pay costs, attorneys’ fees,
or expenses) resulting from the encroachments listed as Exceptions ________ of Schedule B.
By: _______________________________________
Dated:
49 ALTA Endorsement 28.1-06 (Encroachments-Boundaries and Easements) (4-02-12)
Form:
ALTA 28.2-06
4-2-13
Encroachments-Boundaries and Easements - Described Improvements
Availability:
Loan and Owners
Description:
This endorsement insures lenders against loss with respect to certain boundary and
easement encroachments formerly covered in the ALTA 9 series.
This endorsement is similar to the ALTA 28.1-06 (4/2/12) with two differences: (1) For
purposes of the 28.2-06 “improvement” is defined to be improvements specifically
itemized in Paragraph 2. This allows more flexibility in defining which structures the
coverage will apply to and; (2) the enforced removal provisions in Paragraph 3.c and 3.d
can be excluded by listing applicable exceptions in Paragraph 4. This permits the
coverage to apply to all non-excluded exceptions.
It provides coverage for loss by reason of an encroachment of an improvement
appurtenant to the Land onto neighboring property or onto an easement; as well as
insuring against an encroachment from a neighboring land onto the Land unless excepted
to in Schedule B. It also insures against enforced removal of an insured improvement
which encroaches onto neighboring property or onto an easement.
Underwriting
Requirements:
1. An accurate current survey of the Land is required to provide coverage on any
policy other than a 1-4 family residential Loan Policy.
2. Coverage 3.a. may be given for encroachments onto adjoining land if any such
encroachments are excepted to in Schedule B. For encroachments onto easements the
coverage may be given if: (1) there are no easements excepted in Schedule B; or (b)
encroachments onto easements are expressly excepted in Schedule B
3. Coverage 3. b may be provided for encroachments onto the Land from a neighboring
improvement if the encroachment is expressly excepted in Schedule B.
4. Coverage 3.c may be given if any of the following situations apply: (a) there are no
encroachments onto easements excepted in Schedule B; (b) the encroachment is minor
and could be removed at minimal cost; or (c) the encroachment is minor and state counsel
is satisfied that a state court would not require its removal.
5. Coverage 3.d. may be given if any of the following situations apply:(a) there are no
encroachments onto adjoining land excepted in Schedule B; (b) the encroachment is
minor and could be removed at minimal cost; or (c) the encroachment is minor; is not onto
a parcel of vacant land; is not necessary to support the main structure and state counsel is
satisfied that a state court would not require its removal.
6. A determination must be made as to what improvements are covered and those matters
must be shown in Paragraph 2.
7. A determination of excluding enforced removal coverage must be made and that data
must be inserted into Paragraph 4.
50
Encroachments-Boundaries and Easements – Described Improvements ALTA 28.2-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
2. For purposes of this endorsement only, “Improvement” means each improvement on the Land or adjoining land at
Date of Policy, itemized below:
a. An encroachment of any Improvement located on the Land onto adjoining land or onto that portion of the Land subject
to an easement, unless an exception in Schedule B of the policy identifies the encroachment;
b. An encroachment of any Improvement located on adjoining land onto the Land at Date of Policy, unless an exception
in Schedule B of the policy identifies the encroachment;
c.
Enforced removal of any Improvement located on the Land as a result of an encroachment by the Improvement onto
any portion of the Land subject to any easement, in the event that the owners of the easement shall, for the purpose
of exercising the right of use or maintenance of the easement, compel removal or relocation of the encroaching
Improvement; or
d. Enforced removal of any Improvement located on the Land that encroaches onto adjoining land.
4. Sections 3.c. and 3.d. of this endorsement do not insure against loss or damage (and the Company will not pay costs,
attorneys’ fees, or expenses) resulting from the following Exceptions, if any, listed in Schedule B: __________
[The Company may list any Exceptions appearing in Schedule B for which it will not provide insurance pursuant to
Section 3.c.or Section 3.d. The Company may insert “None” if it does not intend to limit the coverage.]
By: _______________________________________
Dated:
ALTA Endorsement 28.2-06 (Encroachments-Boundaries and Easements-Described Improvements) (4-02-13)
51
ALTA 35 SERIES – Mineral Rights
 ALTA 35.0-06 Minerals and Other Subsurface Substances –
Buildings (4/2/12)
Improvements (4/2/12)
Described Improvements (4/2/12)
Land Under Development (4/2/12)
52
Form:
ALTA 35-06 Minerals and Other Subsurface Substances-Buildings
Availability:
Loan
Description:
This endorsement affords insurance only for damage caused by the
enforced removal of an improvement based upon the right to use
the surface of the land to extract or develop minerals. Improvement
is defined to be a building on the Land at Date of Policy.
Underwriting
Requirements:
This endorsement
circumstances:
may
be
issued
under
the
following
1. There is no separation of minerals from the surface estate by
deed, lease or otherwise;
2. There is a separate mineral estate but it does not include any
rights of surface entry; or
3. Mineral rights, with rights of surface entry have been severed
from the surface estate. However, the land and surrounding area is
entirely improved with residential development. Under these
circumstances please submit a request in writing to State Counsel.
Please include all relevant information such as the current use of
the property, the local zoning ordinance, the identity of who holds
the mineral interest and the possibility of obtaining a waiver of the
mineral rights. State Counsel must make this decision; or
4. The instrument containing the mineral rights imposes an
obligation on the mineral holder to not damage existing buildings. In
order to give this coverage you must verify that the current
improvements were in existence at the time the mineral interest
was created and you obtain State Counsel approval to insure.
Item 4(c) allows specific mineral grants to be excepted from
coverage under the endorsement where proper underwriting will not
allow its inclusion. The endorsement does not cover negligence by
the person or entity exercising mineral extraction rights, and does
not cover contamination, explosion, fire, vibration fracturing,
earthquake or subsidence.
53
Minerals and Other Subsurface Substances-Buildings ALTA 35-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
1.
The insurance provided by this endorsement is subject to the exclusion in Section 4 of this endorsement; and the
policy.
2.
For purposes of this endorsement only, “Improvement” means a building on the Land at Date of Policy.
3.
The Company insures against loss or damage sustained by the Insured by reason of the enforced removal or
alteration of any Improvement resulting from the future exercise of any right existing at Date of Policy to use the
surface of the Land for the extraction or development of minerals or any other subsurface substances excepted
from the description of the Land or excepted in Schedule B.
4.
a.
contamination, explosion, fire, vibration, fracturing, earthquake or subsidence; [or]
b.
negligence by a person or an Entity exercising a right to extract or develop minerals or other subsurface
substances[; or
c.
the exercise of the rights described in (
)]. *
* Instructional note: identify the interest excepted from the description of the Land in Schedule A or excepted in
Schedule B that you intend to exclude from this coverage.
provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the
Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express
provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms
and provisions of the policy and of any prior endorsements.
By: _______________________________________
Dated:
54
ALTA Endorsement 35-06 (Minerals and Other Subsurface Substances-Buildings-Loan) (4-2-12)
Form:
ALTA 35.1-06 Minerals and Other Subsurface Substances-Improvements
Availability:
Loan
Description:
enforced removal of an improvement based upon the right to use the
surface of the land to extract or develop minerals. Improvement is defined
to be a building, structure located on the surface of the Land, and any
paved road, walkway, parking area, driveway, or curb, affixed to the Land
at Date of Policy and that by law constitutes real property, but excluding
any crops, landscaping, lawn, shrubbery, or trees.
Underwriting
Requirements:
This endorsement may be issued under the following circumstances:
1. There is no separation of minerals from the surface estate by deed,
lease or otherwise;
2. There is a separate mineral estate but it does not include any rights of
surface entry; or
3. Mineral rights, with rights of surface entry have been severed from the
surface estate; however, the land and surrounding area is entirely
improved with residential development. Under these circumstances
please submit a request in writing to State Counsel. Please include all
relevant information such as the current use of the property, the local
zoning ordinance, the identity of who holds the mineral interest and the
possibility of obtaining a waiver of the mineral rights. State Counsel must
make this decision; or
4. The instrument containing the mineral rights imposes an obligation on
the mineral holder to not damage existing buildings. In order to give this
coverage you must verify that the current improvements were in existence
at the time the mineral interest was created and you obtain State Counsel
approval to insure.
Item 4(c) allows specific mineral grants to be excepted from coverage
under the endorsement where proper underwriting will not allow its
inclusion. The endorsement does not cover negligence by the person or
entity exercising mineral extraction rights, and does not cover
contamination, explosion, fire, vibration, fracturing, earthquake or
subsidence.
55
Minerals and Other Subsurface Substances-Improvements ALTA 35.1-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
1.
policy.
2.
For purposes of this endorsement only, “Improvement” means a building, structure located on the surface of the
Land, and any paved road, walkway, parking area, driveway, or curb, affixed to the Land at Date of Policy and
that by law constitutes real property, but excluding any crops, landscaping, lawn, shrubbery, or trees.
3.
alteration of any Improvement, resulting from the future exercise of any right existing at Date of Policy to use the
4.
a.
b.
substances[; or
c.
)]. *
By: _______________________________________
Dated:
56
ALTA Endorsement 35.1-06 (Minerals and Other Subsurface Substances-Improvements) (4-2-12)
Form:
ALTA 35.2-06 Minerals and Other Subsurface SubstancesDescribed Improvements Endorsement (4-2-12)
Availability:
Loan
Description:
enforced removal of an improvement based upon the right to use
the surface of the land to extract or develop minerals. For
purposes of this endorsement Improvement is defined to be each
improvement itemized on an exhibit.
Underwriting
Requirements:
This endorsement may be issued under the following
circumstances:
1. There is no separation of minerals from the surface estate by
deed, lease or otherwise;
2. There is a separate mineral estate but it does not include any
rights of surface entry; or
3. Mineral rights, with rights of surface entry have been severed
from the surface estate; however, the land and surrounding area is
entirely improved with residential development. Under these
circumstances please submit a request in writing to State Counsel.
Please include all relevant information such as the current use of
the property, the local zoning ordinance, the identity of who holds
the mineral interest and the possibility of obtaining a waiver of the
mineral rights. State Counsel must make this decision; or
4. The instrument containing the mineral rights imposes an
obligation on the mineral holder to not damage existing buildings. In
order to give this coverage you must verify that the current
improvements were in existence at the time the mineral interest
was created and you obtain State Counsel approval to insure.
Item 4(c) allows specific mineral grants to be excepted from
coverage under the endorsement where proper underwriting will not
allow its inclusion. The endorsement does not cover negligence by
the person or entity exercising mineral extraction rights, and does
not cover contamination, explosion, fire, vibration, fracturing
earthquake or subsidence.
57
Minerals and Other Subsurface Substances- Described Improvements ALTA 35.2-06
Policy Number:
File Number:
Premium:
Name of Insured:
$
1.
policy.
2.
For purposes of this endorsement only, “Improvement” means each improvement on the Land at Date of Policy
itemized [on the exhibit attached to this endorsement] [below:]
3.
alteration of any Improvement resulting from the future exercise of any right existing at Date of Policy to use the
4.
a.
b.
substances[; or
c.
)]. *
By: _______________________________________
Dated:
58
ALTA Endorsement 35.2-06 (Minerals and Other Subsurface Substances-Described Improvements) (4-2-12)
Form:
ALTA 35.3-06 Minerals and Other Subsurface Substances-Land Under
Development Endorsement (4-2-12)
Availability:
Loan
Description:
This endorsement affords insurance only for damage caused by the enforced
removal of an improvement based upon the right to use the surface of the land to
extract or develop minerals.
Improvement means a building, structure located on the surface of the Land at
the Date of Policy and any paved road, walkway, parking area, driveway, or curb,
affixed to the Land at the Date of Policy and that by law constitutes real property,
but excluding any crops, landscaping, lawn, shrubbery, or trees.
The endorsement also covers “Future Improvements” which is defined as a
building, structure, or any paved road, walkway, parking area, driveway, or curb
to be constructed on or affixed to the Land in the locations according to Plans
and that by law will constitute real property, but excluding crops, landscaping,
lawn, shrubbery or trees.
Item 2. c. must be filled in to specifically designate the plans.
Underwriting
Requirements:
This endorsement may be issued under the following circumstances:
1. There is no separation of minerals from the surface estate by deed, lease or
otherwise;
2. There is a separate mineral estate but it does not include any rights of
surface entry; or
3. Mineral rights, with rights of surface entry have been severed from the surface
estate; however, the land and surrounding area is entirely improved with
residential development. Under these circumstances please submit a request in
writing to State Counsel. Please include all relevant information such as the
current use of the property, the local zoning ordinance, the identity of who holds
the mineral interest and the possibility of obtaining a waiver of the mineral rights.
State Counsel must make this decision; or
4. The instrument containing the mineral rights imposes an obligation on the
mineral holder to not damage existing buildings. In order to give this coverage
you must verify that the current improvements were in existence at the time the
mineral interest was created and State Counsel approval is obtained.
Item 4(c) allows specific mineral grants to be excepted from coverage under the
endorsement where proper underwriting will not allow its inclusion. The
endorsement does not cover negligence by the person or entity exercising
mineral extraction rights, and does not cover contamination, explosion, fire,
vibration, fracturing, earthquake or subsidence.
5. The Plans must be submitted for review and approval by State Counsel. The
Plans must also be incorporated into the endorsement in Item 2(c).
59
Minerals and Other Subsurface Substances- Land Under Development ALTA 35.3-06
Policy Number:
Premium:
Name of Insured:
File Number:
$
1.
2.
a.
“Improvement” means a building, structure located on the surface of the Land, and any paved road, walkway, parking area,
driveway, or curb, affixed to the Land at Date of Policy and that by law constitutes real property, but excluding any crops,
landscaping, lawn, shrubbery, or trees.
b.
“Future Improvement” means a building, structure, and any paved road, walkway, parking area, driveway, or curb to be
constructed on or affixed to the Land in the locations according to the Plans and that by law will constitute real property, but
excluding any crops, landscaping, lawn, shrubbery, or trees.
c.
“Plans” means the survey, site and elevation plans or other depictions or drawings prepared by __________
______________, last revised _____________ designated as __________ consisting of ___ sheets.
dated
3.
The Company insures against loss or damage sustained by the Insured by reason of the enforced removal or alteration of an
Improvement or a Future Improvement, resulting from the future exercise of any right existing at Date of Policy to use the surface
of the Land for the extraction or development of minerals or any other subsurface substances excepted from the description of the
Land or excepted in Schedule B.
4.
resulting from:
a.
b.
negligence by a person or an Entity exercising a right to extract or develop minerals or other subsurface substances[; or
c.
)]. *
* Instructional note: identify the interest excepted from the description of the Land in Schedule A or excepted in Schedule B
that you intend to exclude from this coverage.
the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the
extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this
endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior
endorsements.
By: _______________________________________
Dated:
60
ALTA Endorsement 35.3-06 (Minerals and Other Subsurface Substances-Land Under Development) (4-2-12)
ALTA Endorsements
on the Horizon
 ALTA 11.2- Mortgage Modification with Additional
Amount of Insurance (Adopted 12/02/13)
 ALTA 41-06 Water – Buildings (Adopted 12/02/13)
 ALTA 41.1-06 Water – Improvements (Adopted
12/02/13)
 ALTA 41.2-06 Water – Described Improvements
(Adopted 12/02/13)
 ALTA 41.3-06 Water – Land Under Development
(Adopted 12/02/13)
 ALTA 42-06 Commercial Lender Group (Adopted
12/02/13)
 ALTA 43-06 Anti-Taint (Adopted 12/02/13)
 ALTA 44-06 Insured Mortgage Recording (Adopted
12/02/13)
61
A Closer Second Look at
Five Newly Decided 2013
S.C. Property Cases
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
The 2014 Economic Outlook for
South Carolina: A Statewide and
Regional Perspective
80
2014 ECONOMIC OUTLOOK
1.
2.
3.
4.
The Strengthening of South Carolina’s Economy
a.
A review of South Carolina’s growth: 2010-2013
b.
Regional momentum and changes in growth patterns
c.
Review of growth by geography
d.
Review of growth by industry
Outlook for 2014
a.
Employment Growth
b.
Unemployment Rate
c.
Personal Income
d.
Housing Activity (Sales, Pricing, and Permit Activity)
Primary Concerns for 2014
a.
Sluggish wage and income growth; the knowledge economy
b.
Consistently high levels of part-time employment
c.
Labor Force Fluctuations
Industrial Sectors Expected to Lead S.C.’s Growth Going Forward
81
Do Your Trust Accounting
Procedures Need A Tune Up?
82
DO YOUR TRUST ACCOUNTING PROCEDURES NEED A TUNE UP?
Adopt and Maintain Appropriate Written Procedures and Controls for Escrow
Trust Accounts:
1.
The New Normal
 Tighter controls
 Lender concerns
 Transparency of financial transaction
2.
Documenting Your Procedures and Controls
 Create a checklist for controls
 Create a written document for procedures
 Controls
 Procedures
 Training
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Areas to Review When Preparing for a Corporate Audit:
1. Inactive Accounts
2. Dormant Files on the Trial Balance
3. Shortages
4. Outstanding Underwriter Checks
5. Policy Lag
6. Title Insurance Rates
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Closing Protection Letter
Claims:
National Trends
and
State Consequences
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87
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“Detailing”
Your Deeds
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“DETAILING” YOUR DEEDS
The purpose of this presentation is to help you avoid creating the types of
problems that the title insurance industry is asked to ignore or insure over or
require solved. Most of the information is basic real estate law covered the first
year of law school but a quick review is always beneficial and can help avoid
claims.
1. Deed Form - SC Code Section 27-7-10
a. Statutory deed form
The State of South Carolina.
“Know all men by these presents that I, A B, of __________, in the
State aforesaid, in consideration of the sum of ___ dollars, to me in
hand paid by C D of __________ County, State of __________, the
receipt of which is hereby acknowledged, have granted, bargained,
sold and released and by these presents do grant, bargain, sell and
release unto the said C D all that (here describe the premises),
together with all and singular the rights, members, hereditaments
and appurtenances to said premises belonging or in any wise incident
or appertaining; to have and to hold all and singular the premises
before mentioned unto said C D, his heirs and assigns, forever. And I
do hereby bind myself, my heirs, executors, and administrators, to
warrant and forever defend all and singular said premises unto said C
D, his heirs and assigns, against myself and my heirs and against
every person whomsoever lawfully claiming or to claim the same, or
any part thereof.
“Witness my hand and seal this ___ day of __________ in the year of
our Lord __________ and in the ___ year of the independence of the
United States of America. “__________ [L.S.]”
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b. After 1993, words of inheritance or succession unnecessary to convey
property in fee simple absolute SC Code Section 27-5-130(B)
2. Name of grantor
a. Use same name as vesting deed
b. Correct error in name in vesting deed
c. Add new name if changed since vesting deed
3. Name of grantee
a. Trustee, not trust
“Steven Smith, as Trustee of the Steven Smith Revocable Living
Trust dated November 1, 2013”
b. No “and/or”
c. Correct name, including Jr. and Sr. designation
4. Estate in land to be created
a. Tenants in common
“to A and B”
b. Joint tenants with rights of survivorship
“to A and B, as joint tenants with rights of survivorship, and
not as tenants in common” SC Code Section 27-7-40
c. Tenants in common with an indestructible right of survivorship
“to A and B, for and during their joint lives and upon the death
of either of them, then to the survivor of them, his or her heirs
and assigns forever in fee simple” Smith v. Cutler, 266 S.C.
546, 623 S.E. 2d 644 (S.C. 2005)
92
d. Life estates
Grantor, “reserving unto myself a life estate, do hereby convey
to A” Hunt v. S.C. Forestry Commission, 358 S.C. 564, 595 S.E.2d
846 (Ct. App. 2004)
“to A, for and during the term of her natural life, and at her
death to B”
5. Legal description
a. Use derivation legal description
b. Recognize potential problems with derivation legal
1) Survey with good point of beginning
2) Metes and bounds, not “butting and bounding”
3) Refer to recorded plat, not unrecorded plat
4) Avoid vague “portion of” without clear boundaries
c. Include derivation information SC Code Section 30-5-35
6. Warranties of title
a. Not required for a valid deed SC Code Section 27-7-20
b. General warranty
“And I do hereby bind myself, my heirs, executors, and
administrators, to warrant and forever defend all and singular the
said premises unto the Grantee, his heirs and assigns, against
myself and my heirs and against every person whomsoever
lawfully claiming or to claim the same, or any part thereof.”
93
c. Limited/Special warranty
Same as general warranty except deleting “and against every
person whomsoever”
d. Quit-claim deed- no warranty language
7. Signature
a. Power of attorney
1) Power of attorney must be recorded
2) Attorney in fact must sign the principal’s name followed by “by
Steven Smith, her attorney in fact”
b. Effective date
c. Fiduciaries
8. Seal SC Code Section 27-7-30
9. Witnesses
a. Two witnesses required for recording SC Code Section 30-5-30
b. Should have no interest in transaction
10. Probate/Acknowledgement
a. Probate or acknowledgment required for recording SC Code
Section 30-5-30
b. Short Form Acknowledgment SC Code Section 26-3-70
c. Uniform Recognition of Acknowledgments Act SC Code Section
26-3-10
94
11. Recording
a. Prerequisites for recording are two witnesses and a
probate/acknowledgment SC Code Section 30-7-10
b. Recording required to create an estate or interest in land and
affect the rights of subsequent creditors
c. Recorded document that was not entitled to be recorded does
not provide notice to third parties Leasing Enterprises, Inc. v.
Livingston, 294 S.C. 204, 363 S.E.2d 410 (Ct. App. 1987)
d. Importance of recording immediately after closing
1) Intervening creditors/conveyances
2) Death of Grantor
3) Death of Grantee
95
Ethics Update
for
Real Estate Lawyers
96
COMMONWEALTH LAND TITLE INSURANCE COMPANY
and
FIDELITY NATIONAL TITLE INSURANCE COMPANY
ANNUAL UNDERWRITING SEMINAR
February 7 and 8, 2014
ETHICS UPDATE FOR REAL ESTATE LAWYERS
William O. Higgins, Esquire
Adams and Reese LLP
I.
RECENT SOUTH CAROLINA SUPREME COURT CASES ON UPL
A.
B.
Wachovia Bank, N.A. vs. Ann T. Coffey and Bank of America, N.A.
Cassandra Regina Crawford vs. Central Mortgage Company and James W. O.
Warrington, Sr. vs. The Bank of South Carolina.
II.
SOUTH CAROLINA COURT OF APPEALS CASE: Mario S. Inglese vs. Carl H. Beal,
et al.
III.
RECENT S.C. BAR ETHICS ADVISORY COMMITTEE OPINIONS
A.
B.
C.
IV.
Ethics Advisory Opinion 12-11.
25 WAYS FOR A SOUTH CAROLINA REAL ESTATE LAWYER TO LOSE
HIS/HER LICENSE — 2013 – EARLY 2014 EDITION
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COMMONWEALTH LAND TITLE INSURANCE COMPANY
and
FIDELITY NATIONAL TITLE INSURANCE COMPANY
ANNUAL UNDERWRITING SEMINAR
February 7 and 8, 2014
ETHICS UPDATE FOR REAL ESTATE LAWYERS
“25 WAYS FOR A SOUTH CAROLINA
REAL ESTATE LAWYER TO LOSE HIS/HER
LICENSE — 2013 – EARLY 2014 EDITION”
William O. Higgins, Esquire
Adams and Reese LLP
Author’s Note: The twenty-five ways to lose your license that follow are derived from actual South
Carolina Supreme Court attorney disciplinary cases published within the last fourteen
months in which the lawyer was suspended or disbarred; however, in virtually all of the
cases, the attorney was found to have engaged in more than one of the listed activities,
and often other egregious conduct as well. The author is not suggesting that any one of
the listed activities, taken in isolation, would result in suspension or disbarment.
1.
Fail to maintain and reconcile your trust accounts.
2.
Fail to ensure that deposits are properly credited to your trust account prior to
disbursements.
3.
Allow (unwittingly) your paralegal to list her landlord and a creditor as service providers
on closing statements for clients, causing checks to be issued to those parties.
4.
Fail to pay your court reporter in a timely manner.
5.
Enter into a business relationship with a client without complying with Rule 1.8(a) of the
Rules of Professional Conduct.
6.
With respect to your trust account, fail to prepare or maintain an accounting journal,
client ledgers, or reconciliation reports.
7.
Use trust account funds for personal expenses such as food, clothing, sunglasses, flowers,
dry cleaning, movie rentals, tanning, and a ski vacation.
8.
Fail to file state and federal income tax returns.
9.
Disburse net proceeds to a seller prior to receiving the funds from your purchaser client.
10.
Use trust account funds from one closing to pay off a mortgage from a prior closing.
126
11.
Knowingly deposit a fraudulent check into your trust account as the basis for tendering
payoff checks on another closing.
12.
“Manufacture” a title insurance company closing protection letter after you’ve been
terminated as an approved attorney.
13.
Borrow money from a client knowing you have no legitimate source from which to repay
the loan.
14.
Fail to ensure that a deed is not properly and timely filed.
15.
Fail to timely reconcile your trust account.
16.
Fail to supervise your paralegal properly with respect to trust account disbursements.
17.
Fail to purchase a home warranty when funds were collected at closing for that purpose.
18.
Fail to comply with the terms of your deferred discipline agreement.
19.
A.
Submit trust account reconciliation reports to the Commission on Lawyer
Conduct that include fictitious outstanding deposits.
B.
Submit trust account reconciliation reports to the Commission on Lawyer
Conduct that simply remove outstanding checks from one month to the next even
though they had neither been voided nor cleared the account.
20.
Represent homeowners’ associations in real estate litigation during a time when you are
administratively suspended from the practice of law for failure to comply with CLE
requirements.
21.
A.
Use your client’s trust account funds to fund purchases of investment real estate
for your own single-member LLC.
B.
Use your client’s trust account funds to pay your legal fees in connection with
those same real estate investment purchases.
22.
Enter into multiple business transactions with your client without written documentation
of the terms of the transactions.
23.
Maintain your trust account in such a way that you are unable to produce an accurate
accounting of your client’s funds.
24.
Commingle your own personal funds with client funds in your trust account.
25.
In a refinance transaction, fail to submit a mortgage payoff to your client’s former lender.
2
127

Commonwealth Land Title Insurance Company Fidelity National

Transcription

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