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Street Assessment Endorsement 1-06
Purpose of Endorsement
The ALTA 1-06 Street Assessments Endorsement insures against loss resulting from the lack of priority of the lien of the Insured Mortgage over the lien for any street assessments due for street improvements under construction or completed at Date of Policy.
Underwriting Requirements
Since street assessments (or other betterments) which are outstanding at the Date of Policy can take priority over the lien of the Insured Mortgage, it is necessary to review the record title to determine that there are no outstanding recorded assessments or assessment liens, and to check with the appropriate municipal department to confirm that there are no pending but unrecorded assessments for street improvements under construction or recently completed prior to issuing this endorsement.
With the creation and use of the ALTA Standard Loan Policy (Revised 6-17-06), the continued need for this endorsement is questionable. Covered Risk 11(b) of the 2006 ALTA Loan Policy insures against loss or damage resulting from the lack of priority of the lien of the Insured Mortgage over the lien of any assessments for street improvements under construction or completed at Date of Policy.
Please contact VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Zoning Endorsement Form 3
Purpose of Endorsement
The ALTA 3 – Zoning Endorsement insures against loss or damage which the insured may sustain by reason of any incorrectness in two special assurances. The first assurance is the identification of the zoning classification of the land described in the policy. The second is a listing of all the uses that are allowed under that classification.
Underwriting Requirements
Before issuing this endorsement, the following requirements must be satisfied:
- Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
- Examine the current zoning regulations and zoning maps of the municipality or municipalities in which the insured property is located and determine the correct zoning classification of the property. Insert the zoning designation in the blank provided in paragraph 1a. of the endorsement;
- Determine the uses which are allowed under that classification and identify in paragraph 1b. of the endorsement;
- Check with the municipal zoning authorities to determine whether anyone is currently appealing the zoning classification of the property. If so, check the local court records to determine the status of the appeal and contact a member of VATC’s underwriting staff before issuing this endorsement; and
- If the property is located in more than one zone, please contact a member of VATC’s underwriting staff.
Additional Premium
Because of the risks associated with this endorsement, an additional premium is required each time one of these endorsements is issued. There is no agent split on this endorsement. The entire additional premium shall be remitted to VATC.
Zoning – Completed Structure Endorsement 3.1
Purpose of Endorsement
The ALTA 3.1 – Zoning – Completed Structure Endorsement provides coverage similar to that provided by the 3.0-06 (zoning classification and allowed uses). In addition to the coverages provided by the standard Zoning Endorsement, this endorsement offers coverage against loss sustained by reason of a final decree either prohibiting the use of the land and any existing structures or requiring the removal of a structure because of the violation of certain zoning ordinances.
Underwriting Requirements
Before issuing this endorsement, the following requirements must be satisfied:
- This endorsement must be reviewed and approved by a VATC Underwriting Counsel prior to issuance.
- Determine the current zoning classification of the land and determine the allowed uses in the zone (see underwriting requirements for Zoning 3-06). Place this information in paragraphs 1a. and 1b. of the endorsement, as applicable.
- An up-to-date “as built” ALTA survey or equivalent, certified to CATIC, must be provided to CATIC sufficiently in advance of the closing for CATIC to review it.
- The survey should contain a zoning matrix showing the following zoning requirements for the property in the subject zone and showing whether the improvements on the property comply with the zoning requirements regarding:
a. Area, width, or depth of the Land as a building site for the structure, b. Floor space area of the structure, c. Setback of the structure from the property lines of the Land, d. Height of the structure, or e. Number of parking spaces.
In order to issue this endorsement, the property cannot be vacant land and the improvements must be fully completed.
Additional Premium
Because of the risks associated with this endorsement, an additional premium is required each time one of these endorsements is issued. There is no agent split on this endorsement. The entire additional premium shall be remitted to VATC.
Zoning – Land Underdevelopment Endorsement – 3.2
Purpose of Endorsement
The ALTA 3.2 – Zoning – Land Under Development Endorsement is designed for issuance on improved property or land on which plans have been approved but work either has not yet begun or is in process. Like the ALTA Endorsement Forms 3-06 and 3.1-06, this Endorsement insures (1) the zoning classification, and (2) authorized uses under that classification. This Endorsement also insures against a final court order prohibiting the present structure, and requiring removal or alteration of either a present Improvement or any proposed Improvement to be built according to Plans defined in the endorsement, because of the violation of the certain zoning ordinances.
Underwriting Requirements:
- This endorsement must be reviewed and approved by a VATC Underwriting Counsel prior to issuance.
- Verify the zoning classification of the land and the allowed uses in that zone. (See underwriting requirements for Zoning 3-06). Place this information in paragraphs 2a. and 2b. of the endorsement, as applicable.
- Obtain current plans which show the proposed improvements on the land (Plans). Identify the Plans in paragraph 1b. of the endorsement.
- Obtain a current ALTA survey or equivalent, certified to CATIC, showing the existing improvements as well as the proposed improvements shown on the Plans.
- The survey should contain a zoning matrix showing the following zoning requirements and whether the Improvements, meaning those already existing and those to be built in accordance with the Plans, comply with the zoning requirements regarding:
a. Area, width or depth of the land as a building site, b. Floor area space of the structure, c. Setback of the structure, d. Height of the structure, and e. Number of parking spaces.
Additional Premium
Because of the risks associated with this endorsement, an additional premium is required each time one of these endorsements is issued. There is no agent split on this endorsement. The entire additional premium shall be remitted to VATC.
Zoning – Completed Improvement – Non-Conforming Use – 3.3
Purpose of Endorsement
This endorsement insures against loss or damage resulting from a Non-Conforming Use, described in the endorsement, not being allowed because that Non-Conforming Use violates a zoning ordinance or regulation applicable to the property being insured. This endorsement also insures against loss if a court decision either prohibits the Non-Conforming Use, or requires the removal or alteration of an existing building, because the Non-Conforming Use violates certain zoning requirements regarding the land or the building listed in the endorsement. The endorsement defines Non-Conforming Use as a use existing at the Date of Policy and prior to the enactment of a zoning ordinance applicable to the land.
Underwriting Requirements
- Verify the zoning classification for the land and the allowed uses in that zone, then determine when any building existing on the land was completed and when the zoning ordinance applicable to the land was enacted.
- Describe the Non-Conforming Use in Section 2a of the endorsement.
- Obtain a zoning letter or certificate from each zoning department or agency with regulatory authority over the land confirming that the use of the land or the building where applicable, is legally non-conforming under all applicable zoning regulations.
- An up-to-date “as built” ALTA survey or equivalent, certified to CATIC, must be provided to CATIC sufficiently in advance of the closing for CATIC to review it.
The survey should contain a zoning matrix showing the following zoning requirements for the property in the subject zone and showing whether the land or any existing buildings violate the zoning requirements regarding:
i. Area, width, or depth of the Land as a building site for any existing building,
ii. Floor space area of the building,
iii. Setback of the structure from the property lines of the Land,
iv. Height of the building, or
v. Number of parking spaces.
In order to issue this endorsement, the property cannot be vacant land and any buildings must be completed.
- If the surveyor is unable to provide the zoning matrix and both the land and the existing building are non-conforming, then the zoning letter or certificate from each zoning department or agency with regulatory authority over the property must confirm that both the land and the existing building are legally non-conforming as to items i-v in Section 2b
of the endorsement. If neither the surveyor nor the regulatory authority is able to provide that confirmation, then the coverage provided by this endorsement cannot be used. A modified form of endorsement, prepared with CATIC’s assistance, will be needed. - This endorsement must be reviewed and approved by a CATIC Underwriting Counsel prior to issuance.
Additional Premium
Because of the risks associated with this endorsement, an additional premium is required each time one of these endorsements is issued. The additional premium is equal to $0.50 per thousand dollars of insurance coverage. There is no agent split on this endorsement. The entire additional premium shall be remitted to CATIC.
Please contact a member of CATIC’s underwriting staff prior to issuing this endorsement.
Zoning – No Zoning Classification – 3.4
Purpose of Endorsement
This endorsement can be used only in cases where there is no zoning in effect or applicable to the subject property at the time the policy is issued. This endorsement insures against loss or damage resulting when a particular use, described in the endorsement, is not allowed by the municipality or county because the use violates a zoning ordinance or regulation applicable to the property being insured. This endorsement also insures against loss caused by a court decision either prohibiting the use or requiring the removal or alteration of the existing building or structure, because the use violates a zoning ordinance as it applies to the land or the existing building or structure.
Underwriting Requirements
- Describe the existing use of the property in Section 2a.
- Verify that no zoning ordinance or zoning regulation applies to the land or any building or structure existing on the land as follows:
a. Obtain a letter from the appropriate municipal or regional regulatory authority confirming that neither the land nor any building or structure on the land is subject to a zoning ordinance or regulation; or
b. Review the records and maps of the appropriate municipal or regional regulatory authority to confirm the absence of any applicable zoning ordinance or regulation; and;
Obtain a current ALTA survey or equivalent, certified to CATIC, showing the land and any existing buildings or structures.
The survey should contain a note or matrix confirming that the land, together with any existing buildings or structures do not violate any zoning ordinance or regulation regarding:
a. Area, width or depth of the land as a building site,
b. Floor area space of the structure,
c. Setback of the structure,
d. Height of the structure, and
e. Number of parking spaces.
- This endorsement must be reviewed and approved by a CATIC Underwriting Counsel prior to issuance.
Additional Premium
Because of the risks associated with this endorsement, an additional premium is required each time one of these endorsements is issued. The additional premium is equal to $0.50 per thousand dollars of insurance coverage. There is no agent split on this endorsement. The entire additional premium shall be remitted to CATIC.
Please contact a member of CATIC’s underwriting staff prior to issuing this endorsement.
Condominium – Assessments Priority Endorsement – 4
Condominium Endorsement – 4.1
Purpose of Endorsement
The ALTA 4.1 – Condominium Endorsement insures against loss or damage resulting from (1) the failure of the unit to be a part of a condominium; (2) failure of the condominium documents to comply with the requirements of the state statutes, to the extent that such failure affects the title to the unit or the common elements; (3) present violations of restrictive covenants which restrict the use of the condominium unit or the forfeiture or reversion of Title by reason of those covenants; (4) common charges and assessments that are due but unpaid as of the policy’s effective date; (5) failure of the condominium unit to be entitled to be assessed for real property taxes as a separate unit; (6) the obligation to remove improvements which exist at date of policy because of present encroachments; and (7) failure of title by reason of an existing right of first refusal.
This endorsement can be used when the property to be insured is an existing unit in a condominium that has been created in accordance with state law.
Underwriting Instructions
- Verify that the declaration, master deed or other document creating the condominium has been recorded in the appropriate land records, and that the unit to be insured has been created in accordance with the requirements of the state statutes.
- Please establish that:
a. common charges or assessments are current; b. there are no violations of existing covenants; and c. there are no encroachments of improvements over a boundary line or into any easements
- Any right of first refusal must be waived by the homeowners’ association prior to closing. This endorsement may be incorporated into the policy by checking the appropriate box at the bottom of the policy’s Schedule B.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Planned Unit Development Endorsement (5.1-06)
Purpose of Endorsement
The ALTA 5.1-06 Planned Unit Development Endorsement insures against loss or damage resulting from: (1) present violations of any restrictive covenants referred to in the policy’s Schedule B that restrict the use of the land or the forfeiture or reversion of Title by reason of those covenants; (2) any charges or assessments in favor of a homeowners’ association that are due and unpaid at Date of Policy; (3) the enforced removal of any existing structure other than a boundary wall or fence because it encroaches onto adjoining land or into any easement; and (4) failure of the Title by reason of an existing right of first refusal.
This endorsement can be used when the property to be insured is part of a planned unit development. The insured property in a planned unit development can consist of a fee simple interest in a lot, townhouse, or other single-family residence together with an appurtenant easement in common elements. The endorsement may be used with either a Loan Policy or an Owner’s Policy.
Underwriting Requirements
- Obtain any documentation required by state statute to be provided to the buyer, when applicable. Also, please confirm that:
a. Common charges or assessments are current; b. There are no violations of existing covenants; and c. There are no encroachments of improvements over a boundary line or into any easements.Any restrictive covenants need to be reviewed to confirm that there is no forfeiture or right of reversion provision.
2. Any right of first refusal must be waived by the homeowners’ association prior to closing.
This endorsement may be incorporated into the policy by checking the appropriate box at the bottom of the policy’s Schedule B.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.6)
Variable Rate Mortgage – 6
Purpose of Endorsement
The ALTA 6 Variable Rate Endorsement, among other things, affords insured lenders with protection against loss by reason of the invalidity, loss of priority or unenforceability of the lien of the Insured Mortgage resulting from the provisions in the mortgage that provide for changes in the rate of interest (variable rate, convertible, renegotiable rate, or adjustable rate mortgages).
Underwriting Requirements
This endorsement may be issued provided that the mortgage to be insured discloses that the loan has a variable or adjustable interest rate based upon a formula that can be ascertained by referring to either the mortgage or the note referred to in the mortgage.
This endorsement may be incorporated into a Standard Loan Policy by checking the appropriate box at the bottom of the policy’s Schedule B.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Variable Rate Mortgage – Negative Amortization Endorsement – 6.2
Purpose of Endorsement
The ALTA 6.2 – Variable Rate – Negative Amortization Endorsement, among other things, affords insured lenders with protection against loss by reason of the invalidity, loss of priority or unenforceability of the lien of the Insured Mortgage resulting from the provisions in the mortgage that provide for changes in the rate of interest and a negative amortization feature.
Negative amortization means that the monthly payments are not sufficient to pay off the principal and interest due in equal payments over the term of the mortgage. The unpaid portion of the interest is added back into the principal of the mortgage and can actually cause an increase in the indebtedness secured by the mortgage.
Underwriting Requirements
This endorsement may be issued provided the recorded mortgage discloses that (1) the loan has a variable or adjustable interest rate based upon a formula that can be ascertained by referring to the mortgage or the note referred to in the mortgage, and (2) the loan has a negative amortization feature based upon parameters that can be ascertained by referring to the mortgage or the note referred to in the mortgage.
This endorsement may be incorporated into a Standard Loan Policy by checking the appropriate box at the bottom of the policy’s Schedule B.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Manufactured Housing Unit – Conversion – Loan Policy Endorsement – 7.1
Purpose of Endorsement
The ALTA 7.1 – Manufactured Housing Unit – Conversion – Loan Policy Endorsement can be used only with the 2006 ALTA Loan Policy. It insures against loss resulting when the manufactured housing unit located on the land is not real property, or where the owner of the land is not the owner of the manufactured housing unit. Because manufactured housing units, including mobile homes, may not qualify to be insured by title insurance policies, this endorsement may be used only with the approval from a member of CATIC’s underwriting staff.
Underwriting Requirements
The endorsement is available only when the manufactured housing unit is permanently attached to the land and becomes part of the real estate. If the manufactured housing unit is not real estate, it remains personalty and is not insurable under a policy of title insurance, even though evidence of its ownership or of a transfer in ownership is recorded in the land records.
In order to issue the endorsement, you must verify that:
- The mortgagor owns both the land and the manufactured housing unit located on the land;
- The manufactured housing unit is considered real property under state law;
- There are no personal property liens or other unreleased liens filed against the manufactured housing unit;
- The lien of the Insured Mortgage must attach to the manufactured housing unit; and
- The mortgage can be foreclosed against both the land and the manufactured housing unit in a single foreclosure action.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Manufactured Housing Unit – Conversion – Owner Policy Endorsement – 7.2
Purpose of Endorsement
The ALTA 7.2 – Manufactured Housing Unit – Conversion – Owner Policy Endorsement can be used only with the 2006 ALTA Owner Policy. It insures against loss resulting when the manufactured housing unit located on the land is not real property, or where the owner of the land is not the owner of the manufactured housing unit. Because manufactured housing units, including mobile homes, may not qualify to be insured by title insurance policies, this endorsement may be used only with the approval from a member of VATC’s underwriting staff.
Underwriting Requirement
The endorsement is available only when the manufactured housing unit is permanently attached to the land and becomes part of the real estate. If the manufactured housing unit is not real estate, it remains personalty and is not insurable under a policy of title insurance, even though evidence of its ownership or of a transfer in ownership is recorded in the land records.
In order to issue the endorsement, you must verify that:
- The Insured owns both the land and the manufactured housing unit located on the land;
- The manufactured housing unit is considered real property under state law; and
- There are no personal property liens or other unreleased liens filed against the manufactured housing unit.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Environmental Protection Lien Endorsement – 8.1
Purpose of Endorsement
The ALTA 8.1 – Environmental Protection Lien Endorsement can be issued only when issuing a Mortgagee Policy insuring title to residential 1-4 family property. Paragraph (a) insures against loss resulting if there are any environmental protection liens filed in the Public Records which have priority over the lien of the Insured Mortgage unless excepted in Schedule B. Paragraph (b) insures against loss resulting when there are state statutes giving environmental protection liens filed after the Date of Policy priority over the lien of the Insured Mortgage, except for liens pursuant to those statutes specifically excepted under paragraph (b).
Underwriting Requirements
An exception must be taken in Schedule B of the policy for any recorded notice of lien or notice of enforcement action that is not released prior to issuance of the policy.
This endorsement may be incorporated into a Standard Loan Policy by checking the appropriate box at the bottom of the policy’s Schedule B.
This endorsement is not available if you are insuring commercial, industrial or mixed use property. A separate commercial environmental lien endorsement (ALTA 8.2-06) is available for that purpose.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Commercial Environmental Protection Lien Endorsement (8.2-06)
Purpose of Endorsement
The ALTA 8.2-06 Commercial Environmental Protection Lien Endorsement is simply an affirmative statement of coverage contained in the ALTA Standard Loan Policy.
ALTA 8.2-06 Endorsement is available for both owner’s and loan policies. It is intended for use with improved or unimproved commercial or residential properties.
Underwriting Requirements
An exception must be taken in Schedule B of the policy of title insurance for any recorded notice of lien or notice of enforcement action that is not released prior to issuance of the policy.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Restrictions, Encroachments, Minerals – Loan Policy Endorsement (9-06)
Purpose of Endorsement
The ALTA 9-06 Restrictions, Encroachments, Minerals-Loan Policy Endorsement gives an insured additional affirmative coverage against loss resulting from violations of restrictive covenants, encroachments over property lines, building lines and easements, and the exercise of mineral rights. This coverage is not contained in the Standard Loan Policy.
Because this endorsement provides very broad coverage, you must be sure that all of the following instructions have been followed before issuing this endorsement. If you have any procedural or underwriting questions concerning its use, please contact a member of VATC’s underwriting staff.
Underwriting Requirements
- Examine any covenants, conditions and/or restrictions which affect the title (referred to in the endorsement as a “Covenant”) and verify that the lender’s interest cannot be cut off, subordinated or otherwise impaired by any Covenant. Take an exception in Schedule B of the policy for each Covenant.
- Obtain a properly executed Owner’s Affidavit (CATIC A-100) to confirm that there are no present violations of any enforceable Covenant, and to confirm that no buildings, structures or improvements on the insured premises encroach onto any adjoining property, or into any easement, and that no buildings, structures or improvements located on adjoining property encroach into the insured premises.
- If the policy will have an Amount of Insurance in excess of $5,000,000.00, there must be a current ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, which locates any existing structures. For improved land, review the survey to confirm that no buildings, structures or improvements on the insured premises encroach onto adjoining lands, over a setback line or onto any portion of the insured premises subject to any easement shown in Schedule B. For both improved and unimproved land, check to see that no buildings, structures or improvements located on adjoining lands encroach onto the insured premises.If your inquiry reveals that any Covenant has been violated, or that there is an encroachment of any kind, please contact a member of CATIC’s underwriting staff prior to issuing the endorsement. Take exception in the Schedule B of the policy for specific violations of any Covenant and for specific encroachments.
- Take an exception in Schedule B for each easement, agreement or notice of violation that affects the title.
- Take an exception in Schedule B for each mineral right that affects the title. If anyone has the right to use the surface of the insured premises for the extraction or development of any minerals excepted from the description of said land or shown as an exception in Schedule B, please call a member of VATC’s underwriting staff for additional instructions before issuing this endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Covenants, Conditions and Restrictions – Owner Policy Endorsement (9.1-06 & 9.2-06)
Purpose of Endorsements
The ALTA 9.1-06 and 9.2-06 Covenants, Conditions and Restriction – Owner Policy Endorsements provide a significant amount of affirmative coverage for loss or damage resulting from violations of restrictive covenants.
The 9.1-06 is used when the Land is unimproved.
The 9.2-06 is used for improved land.
Underwriting Requirements
- Examine the covenants, conditions and/or restrictions that affect the title (referred to in the endorsement as a “Covenant”) and verify that the owner’s interest cannot be cut off or otherwise impaired by any Covenant. Take an exception in the policy’s Schedule B for each Covenant.
- Obtain a properly executed Owner’s Affidavit (CATIC A-100) confirming that there are no present violations of any Covenant.
- ADDITIONAL REQUIREMENTS FOR IMPROVED LAND: To issue the 9.2-06 endorsement for an owner of improved land, there should also be a current ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, which locates any structures in existence at the Date of Policy. Review the survey to confirm that no buildings, structures or improvements on the insured premises encroach over a building setback line shown on the map or plan.
NOTE: If your inquiry reveals that any Covenant has been violated, or that there is an encroachment of any improvement over a setback line, or that a notice of violation has been recorded, please take an exception in Schedule B of the policy for each violation or encroachment, and contact a member of VATC’s underwriting staff prior to issuing the endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of either of these endorsements.
Covenants, Conditions and Restrictions – Owner Policy Endorsement (9.1-06 & 9.2-06)
Purpose of Endorsements
The ALTA 9.1-06 and 9.2-06 Covenants, Conditions and Restriction – Owner Policy Endorsements provide a significant amount of affirmative coverage for loss or damage resulting from violations of restrictive covenants.
The 9.1-06 is used when the Land is unimproved.
The 9.2-06 is used for improved land.
Underwriting Requirements
- Examine the covenants, conditions and/or restrictions that affect the title (referred to in the endorsement as a “Covenant”) and verify that the owner’s interest cannot be cut off or otherwise impaired by any Covenant. Take an exception in the policy’s Schedule B for each Covenant.
- Obtain a properly executed Owner’s Affidavit (CATIC A-100) confirming that there are no present violations of any Covenant.
- ADDITIONAL REQUIREMENTS FOR IMPROVED LAND: To issue the 9.2-06 endorsement for an owner of improved land, there should also be a current ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, which locates any structures in existence at the Date of Policy. Review the survey to confirm that no buildings, structures or improvements on the insured premises encroach over a building setback line shown on the map or plan.
NOTE: If your inquiry reveals that any Covenant has been violated, or that there is an encroachment of any improvement over a setback line, or that a notice of violation has been recorded, please take an exception in Schedule B of the policy for each violation or encroachment, and contact a member of VATC’s underwriting staff prior to issuing the endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of either of these endorsements.
Covenants, Conditions and Restrictions – Owner Policy Endorsement (9.1-06 & 9.2-06)
Purpose of Endorsements
The ALTA 9.1-06 and 9.2-06 Covenants, Conditions and Restriction – Owner Policy Endorsements provide a significant amount of affirmative coverage for loss or damage resulting from violations of restrictive covenants.
The 9.1-06 is used when the Land is unimproved.
The 9.2-06 is used for improved land.
Underwriting Requirements
- Examine the covenants, conditions and/or restrictions that affect the title (referred to in the endorsement as a “Covenant”) and verify that the owner’s interest cannot be cut off or otherwise impaired by any Covenant. Take an exception in the policy’s Schedule B for each Covenant.
- Obtain a properly executed Owner’s Affidavit (CATIC A-100) confirming that there are no present violations of any Covenant.
- ADDITIONAL REQUIREMENTS FOR IMPROVED LAND: To issue the 9.2-06 endorsement for an owner of improved land, there should also be a current ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, which locates any structures in existence at the Date of Policy. Review the survey to confirm that no buildings, structures or improvements on the insured premises encroach over a building setback line shown on the map or plan.
NOTE: If your inquiry reveals that any Covenant has been violated, or that there is an encroachment of any improvement over a setback line, or that a notice of violation has been recorded, please take an exception in Schedule B of the policy for each violation or encroachment, and contact a member of VATC’s underwriting staff prior to issuing the endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of either of these endorsements.
Private Rights – Loan Policy & Private Rights – Owners Policy Endorsement (Forms 9.6-06 & 9.9-06)
Purpose of Endorsement
The ALTA 9.6-06 and 9.9-06 Private Rights Endorsements insure against loss if the enforcement of a Private Right results in the invalidity, unenforceability or lack of priority of the Insured Mortgage, or causes a loss of the Title in the event that the Insured acquires the property by foreclosure or deed in lieu. “Private Right” is defined as a private charge or assessment, an option to purchase or right of first refusal, or a right of prior approval of a future purchaser or occupant.
Underwriting Requirements
Obtain a properly executed Owner’s Affidavit (CATIC A-100) confirming that there are no present violations of any enforceable covenants, conditions and/or restrictions which affect the title (referred to in the endorsement as a “Covenant”). Take an exception in the policy’s Schedule B for each Covenant.
LOAN POLICY (ALTA 9.6-06): Examine each Covenant and confirm that there is no Private Right contained in a Covenant that could (1) render the Insured Mortgage invalid or unenforceable, or cause the mortgage to lose its priority; or (2) cause the loss of the title acquired in satisfaction or partial satisfaction of the debt.
OWNER POLICY (ALTA 9.9-06): Examine each Covenant and confirm that there is no Private Right contained in a Covenant that could cause the loss of the Insured’s Title.
When considering the use of either the 9.6-06 or the 9.9-06, if a review of any Covenant affecting the title reveals the existence of either a private charge or assessment, an option to purchase, a right of first refusal or a right of prior approval of a future purchaser or occupant, please add the Exception number corresponding to that Covenant, and appearing in the policy’s Schedule B, to Section 4d. of the endorsement, and contact a member of VATC’s underwriting staff prior to issuing the endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Restrictions, Encroachments, Minerals – Land Under Development – Loan Policy Endorsement (9.7-06 & 9.8-06)
Purpose of Endorsement
The ALTA 9.7-06 Restrictions, Encroachments, Minerals – Land Under Development – Loan Policy Endorsement is for use with a loan policy and provides affirmative coverage similar to the Restrictions, Encroachments, Minerals Endorsement. The ALTA 9.8-06 Covenants, Conditions and Restrictions – Land Under Development – Owner Policy Endorsement is used with an owner policy and provides affirmative coverage similar to the Covenants, Conditions and Restrictions Endorsement. These endorsements, however, also provide coverage against loss resulting from the violation of an enforceable Covenant by either an Improvement existing at Date of Policy or a Future Improvement. Similar coverage is given regarding the enforced removal of either an existing Improvement or a Future Improvement because of a violation of a setback line. The 9.7-06 also insures against loss or damage because either an existing Improvement or a Future Improvement encroaches onto adjoining land or into an easement.
Each endorsement defines Future Improvement as one shown on a Plan identified in the endorsement.
Underwriting Requirements
- Examine any covenants, conditions and/or restrictions that affect the title (referred to in the endorsement as a “Covenant”) and verify that the owner’s or lender’s interest cannot be cut off or otherwise impaired by any Covenant. If you are issuing a 9.7-06 for a loan policy, also verify that the lender’s interest cannot be subordinated as a result of a Covenant. Take an exception in the policy’s Schedule B for each Covenant.
- Obtain a properly executed Owner’s Affidavit (CATIC A-100) confirming that there are no present violations of any Covenant.
- To issue this endorsement, there must be a current ALTA survey certified to CATIC, or equivalent acceptable to CATIC, that locates any structures in existence at the Date of Policy as well as any improvements that are proposed to be built on the Land. Review the survey or plan to confirm that no existing or proposed improvements on the insured premises encroach onto adjoining lands, over a setback line or onto any portion of the insured premises subject to any easement shown in Schedule B, and that no improvements located on the adjoining lands encroach onto the insured premises. This survey or plan (referred to as the “Plan”) must be specifically identified in Section 2d. of the endorsement.
NOTE: If your inquiry reveals that any Covenant has been violated, or that there is an encroachment of any kind, or that a notice of violation has been recorded, please take an exception in Schedule B of the policy for each violation or encroachment, and contact a member of VATC’s underwriting staff prior to issuing the endorsement.
For the ALTA 9.7-06, these additional requirements apply:
- Take an exception in Schedule B for each easement, agreement or notice of violation that affects the title.
- Take an exception in Schedule B for each mineral right that affects the title. If anyone has the right to use the surface of the insured premises for the extraction or development of any minerals excepted from the description of said land or shown as an exception in Schedule B, please call a member of VATC’s underwriting staff for additional instructions before issuing this endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Restrictions, Encroachments, Minerals – Current Violations – Loan Policy (9.10-06)
Purpose of Endorsement
The ALTA 9.10-06 Restrictions, Encroachments, Minerals – Current Violations – Loan Policy Endorsement gives an insured additional affirmative coverage against loss resulting from violations of restrictive covenants, encroachments over property lines, building lines and easements, and the exercise of mineral rights. This coverage is not contained in the Standard Loan Policy.
This form is almost identical to the ALTA 9-06, but this endorsement insures against loss resulting from a covenant violation existing at Date of Policy that impairs or eliminates the Insured Mortgage or causes a loss of the Insured’s Title.
Because this endorsement provides very broad coverage, you must be sure that all of the following instructions have been followed before issuing this endorsement. If you have any procedural or underwriting questions concerning its use, please contact a member of CATIC’s underwriting staff.
Underwriting Requirements
- Examine any covenants, conditions and/or restrictions which affect the title (referred to in the endorsement as a “Covenant”) and verify that the lender’s interest cannot be cut off, subordinated or otherwise impaired by any Covenant. Take an exception in Schedule B of the policy for each Covenant.
- Obtain a properly executed Owner’s Affidavit (CATIC A-100) to confirm that there are no current violations of any enforceable Covenant, and to confirm that no buildings, structures or improvements on the insured premises encroach onto any adjoining property, or into any easement, and that no buildings, structures or improvements located on adjoining property encroach into the insured premises.
- If the policy will have an Amount of Insurance in excess of $5,000,000.00, there must be a current ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, that locates any existing structures. For improved land, review the survey to confirm that no buildings, structures or improvements on the insured premises encroach onto adjoining lands, over any setback lines or onto any portion of the insured premises subject to any easement shown in Schedule B. For both improved and unimproved land, checks to see that no buildings, structures or improvements located on adjoining lands encroach onto the insured premises.If your inquiry reveals that any Covenant has been or is being violated, or that there is an encroachment of any kind, please contact a member of VATC’s underwriting staff prior to issuing the endorsement. Take exception in Schedule B of the policy for specific violations of any Covenant and for specific encroachments.
- Take an exception in Schedule B for each easement, agreement or notice of violation that affects the title.
- Take an exception in Schedule B for each mineral right that affects the title. If anyone has the right to use the surface of the insured premises for the extraction or development of any minerals excepted from the description of said land or shown as an exception in Schedule B, please call a member of VATC’s underwriting staff for additional instructions before issuing this endorsement.
Assignment Endorsement -10
Purpose of Endorsement
The ALTA 10- Assignment Endorsement recognizes an assignment of the Insured Mortgage by changing the name of the Insured to reflect the Assignee identified in the endorsement. It insures against loss or damage resulting from the failure of the assignment to transfer title to the Insured Mortgage in the Assignee. Unless otherwise stated in the endorsement, this protection extends to situations where the failure to transfer results from any previous modification, release or discharge of the mortgage prior to the Date of Endorsement.
Underwriting Requirements
The Assignment Endorsement can be attached to a policy insuring an assigned mortgage when the assignment is executed by the original insured (or the last assignee of record to be recognized as an insured) and the assignment is recorded. The results of a bringdown search must confirm that the assigning party is the record holder of the Insured Mortgage and that the mortgage remains in effect and unreleased.
Insert the name of the assignee (as set forth on the assignment instrument) in Section 1 of the endorsement. Refer to the assignment, including its date and recording information, in Section 2a.
To the extent that there is an existing modification of the mortgage and the modification is not already reflected on the policy, add a reference to the modification in Section 2b. of the endorsement; but if there has been no prior modification, insert the word “none.”
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Assignment and Date Down Endorsement – 10.1
Purpose of Endorsement
The ALTA 10.1 – Assignment and Date Down Endorsement recognizes an assignment of the insured mortgage by changing the name of the Insured to reflect the Assignee identified in the endorsement. It also insures against loss or damage resulting from the failure of the assignment to transfer title in the Insured Mortgage to the Assignee. Unless otherwise stated in the endorsement, this protection extends to situations where the failure to transfer results from any previous modification, release or discharge of the mortgage prior to the Date of Endorsement.
This endorsement also extends coverage to insure against loss resulting from any lien for taxes or assessments, lack of priority of the lien of the Insured Mortgage over defects, liens or encumbrances, and notices of federal tax liens or bankruptcies that intervene between the original Date of Policy and the Date of Endorsement, unless these matters are excepted in Sections 2b., 2c. and 2d. of the endorsement.
Underwriting Instructions
The Assignment Endorsement can be attached to a policy insuring an assigned mortgagee when the assignment is executed by the original insured (or the last assignee of record to be recognized as an insured) and the assignment is recorded. The assigning party must execute the assignment in accordance with applicable law.
The results of a bringdown search must also be available in order to confirm that the assigning party is the record holder of the mortgage and that the mortgage remains in effect and unreleased.
Insert the name of the Assignee (as set forth on the assignment instrument) in Section 1 of the endorsement. In Section 2a., refer to the assignment, including its date and recording information.
To the extent that there is an existing modification of the mortgage and the modification is not already reflected on the policy, add a reference to the modification in Section 2e. of the endorsement. If there has been no modification, insert the word “none.”
Any outstanding taxes or assessments that are due and payable must be excepted in Section 2b. Any defects, liens, or encumbrances disclosed by the search that may have priority over the Insured Mortgage must be excepted in Section 2c. Also, any notices of federal tax liens or notices of bankruptcy against the owner disclosed by the Public Records must be excepted in Section 2d.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Mortgage Modification – 11
Purpose of Endorsement
The ALTA 11 Mortgage Modification Endorsement covers loss resulting from a modification of mortgage when that modification causes the invalidity, unenforceability or loss of priority of the Insured Mortgage.
Underwriting Requirements
The endorsement is available if the modification is properly executed and recorded, and if the original mortgage is insured by CATIC. In order to provide this endorsement, a title rundown from the existing effective Date of Policy must be done in situations where the modification has the potential to increase the obligation or indebtedness imposed upon the borrower. Examples of situations where the obligation or indebtedness may increase include cases where the modification:
· changes the interest rate from fixed to adjustable or from adjustable to fixed
· increases the interest rate
If the title rundown reveals the recording of liens between the date of original mortgage (or the date of the last modification endorsement) and the date of the new modification, these intervening recorded interests should be added as exceptions to Section 2 of the endorsement.
In cases where the modification can affect the validity, enforceability or priority of the modified mortgage because the modification substantially alters the nature and character of the obligation, CATIC requires prior review and approval from a member of CATIC’s underwriting staff. Examples of such substantial alterations include:
· increases in the amount of an existing loan or adding a new loan
· substitution or replacement of constituent documents
· adding land or other new collateral
The endorsement by its terms does not extend the effective Date of Policy nor does it increase the policy’s face amount. If the insured lender requests these changes, please contact a member of CATIC’s underwriting staff for underwriting and pricing information. In these cases, CATIC will assist by issuing the requested modification. Please contact the Industry Relations Department with endorsement requests relating to more complex mortgage modifications or in cases where additional coverage is requested.
Please contact a member of CATIC’s underwriting staff if there are questions about the issuance of this endorsement.
Mortgage Modification with Subordination Agreement – 11.1
Mortgage Modification with Additional Amount of Insurance – 11.2
Aggregation – Loan Endorsement – 12
Purpose of Endorsement
The ALTA 12 Aggregation Endorsement is also known as a “tie-in” endorsement. This endorsement aggregates or ties together CATIC policies insuring multiple mortgages that all secure the same indebtedness. Aggregating the policies together eliminates the need to charge a premium for each policy. Instead, a single premium, based on the amount borrowed, can be charged.
The Company’s liability to the insured lender under the endorsement is the total amount of the underlying indebtedness.
Underwriting Instructions
This endorsement can be used when there are multiple mortgages securing a common indebtedness.
The principal amount of each mortgage is usually equal to the total amount of the underlying debt. If this is not the case, or if the transaction involves properties in multiple states, please review the transaction with a member of VATC’s underwriting staff prior to issuing the endorsement.
The endorsement requires the addition of information regarding the multiple mortgagee title policies. Please complete Section 1 of the endorsement by filling in the appropriate policy numbers, property location information, and respective policy amounts. You must also fill in the Aggregate Amount of Insurance coverage in Section 3 of the endorsement. This Aggregate Amount of Insurance should be equal to the total amount of the underlying indebtedness.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Leasehold – Owner’s Endorsement (13-06)
Purpose of Endorsement
The ALTA 13-06 Leasehold – Owner’s Endorsement may be used for Owner Policies which insure the interest of a Lessee under the terms of a lease described in Schedule A of the policy. This endorsement contains provisions regarding the valuation of the insured interest related to computing loss or damage under the policy in the event the Insured is evicted.
Underwriting Requirements
In order to produce a leasehold owner policy, you must complete this endorsement and include it in a Standard CATIC Owner Policy jacket along with the standard owner policy inserts.
- SCHEDULES A and B
Prepare Schedules A and B in the same manner as you would for an ordinary owner title insurance policy except:
(a) Check the “leasehold estate” box in Paragraph 2 of Schedule A instead of the “fee simple box.”
(b) Put the Lessee’s name in Paragraph 3 of Schedule A.
(c) Additionally, in Paragraph 3 of Schedule A, insert the words “by virtue of a” after inserting the name of the lessee and then describe the lease information. EXAMPLE: (Insert Lessee’s name) by virtue of a Lease from XYZ Co. to ABC, Inc., dated June 1, 2016, a notice of which lease was recorded/filed with the _____ Land Records in Volume ____, Page ____.
(d) With respect to Schedule B, Part I, in addition to taxes and the usual encumbrances, an exception must be taken for the lease recited in Schedule A. EXAMPLE: The terms, agreements, reservations, restrictions, covenants and conditions contained in the lease agreement between XYZ Co., as lessor, and ABC, Inc., as lessee, dated June 1, 2016, a notice of which lease was recorded/filed with the _____ Land Records in Volume _____, Page _____.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Leasehold – Loan Endorsement (13.1-06)
Purpose of Endorsement
The ALTA 13.1-06 Leasehold – Loan Endorsement may be used for Loan Policies which insure a mortgage encumbering a leasehold estate. This endorsement contains provisions regarding the valuation of the insured interest related to computing loss or damage under the policy in the event of the eviction of either the Tenant (prior to a foreclosure) or the Insured (if the Insured acquires all or part of the title by virtue of a foreclosure or deed in lieu).
Underwriting Requirements
In order to produce a leasehold mortgagee policy, you must complete this endorsement and include it in a Standard CATIC Loan Policy (also referred to as a mortgagee policy) jacket along with the standard mortgagee policy (MP) insert.
- SCHEDULES A and B
Prepare Schedules A and B in the same manner as you would for an ordinary mortgagee title insurance policy except:
(a) Check the “leasehold estate” box in Paragraph 2 of Schedule A on CATIC Form MP instead of the “fee simple box.”
(b) Put the lessee’s name in Paragraph 3 of Schedule A on CATIC Form MP.
(c) Additionally, in Paragraph 3 of Schedule A, insert the words “by virtue of a” after inserting the name of the lessee and then describe the lease information. EXAMPLE: (Insert Lessee’s name) by virtue of a Lease from XYZ Co. to ABC, Inc., dated June 1, 2016, a notice of which lease was recorded/filed with the _______ Land Records in Volume ____, Page ____.
(d) With respect to Schedule B, Part I, in addition to taxes and the usual encumbrances, an exception must be taken for the lease recited in Schedule A. EXAMPLE: The terms, agreements, reservations, restrictions, covenants and conditions contained in the lease agreement between XYZ Co., as lessor, and ABC, Inc., as lessee, dated June 1, 2016, a notice of which lease was recorded/filed with the ______ Land Records in Volume _____, Page _____.
This endorsement may be incorporated into the policy by checking the appropriate box at the bottom of the Loan Policy’s Schedule B.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Future Advance – Priority Endorsement – 14
Purpose of Endorsement
The ALTA 14- Future Advance – Priority Endorsement insures against loss resulting from the invalidity and unenforceability of a mortgage that secures any future Advance of money made after the recording of the mortgage pursuant to a loan agreement or a note authorizing future advances. The endorsement also insures against loss resulting from the lack of priority of the lien of the Insured Mortgage as security for each Advance over any other lien or encumbrance.
Underwriting Requirements
State statutes protect the priority of future advances made pursuant to a loan agreement or a note authorizing future advances and secured by a mortgage, provided the statutory requirements are complied with in the mortgage instrument. The proposed mortgage instrument and its exhibits must be reviewed to verify compliance with the specific requirements of any state statute that protects the priority of Advances made pursuant to a future advance loan.
This endorsement can be used only in a state where the lender’s prior knowledge of a lien or encumbrance intervening between Date of Policy and the Advance will not affect the priority of the Advance relative to that intervening lien or encumbrance.
If prior knowledge of an intervening lien or encumbrance can affect the priority of a future Advance, use the ALTA 14.1-06 Future Advance – Knowledge Endorsement.
Please contact a member of the VATC underwriting staff if you have any questions or concerns regarding whether the mortgage to be insured complies with the state statute addressing future advance mortgages.
Future Advance – Knowledge Endorsement – 14.1
Purpose of Endorsement
The ALTA 14.1- Future Advance – Knowledge Endorsement insures against loss resulting from the invalidity and unenforceability of a mortgage that secures any future Advance of money made after the recording of the mortgage pursuant to a loan agreement or a note authorizing future advances. This endorsement also insures against loss resulting from the lack of priority of the lien of the Insured Mortgage as security for each Advance over any other lien or encumbrance.
This endorsement contains an exclusion for loss or damage resulting from the lack of priority of any Advance made after the Insured has knowledge of liens, encumbrances or other matters intervening between Date of Policy and the Advance.
Underwriting Requirements
State statutes protect the priority of future advances made pursuant to a loan agreement or a note authorizing future advances and secured by a mortgage, provided the statutory requirements are complied with in the mortgage instrument. The proposed mortgage instrument and its exhibits must be reviewed to verify compliance with the specific requirements of any state statute that protects the priority of Advances made pursuant to a future advance loan.
This is the appropriate endorsement to use in any state where a lien or encumbrance intervening between the Date of Policy and a future Advance can take priority over that Advance because the Advance is made after the lender has actual knowledge of the lien or encumbrance.
Please contact a VATC title counsel if you have any questions or concerns regarding whether the mortgage to be insured complies with the state statute addressing future advance mortgages.
Future Advance – Letter of Credit Endorsement -14.2
Purpose of Endorsement
The ALTA 14.2-Future Advance – Letter of Credit Endorsement insures against loss resulting from the invalidity and unenforceability of a mortgage that secures any future (made after the recording of the mortgage) Advance of money pursuant to a letter of credit reimbursement agreement. This endorsement also insures against loss resulting from the lack of priority of the lien of the Insured Mortgage as security for each Advance over any other lien or encumbrance.
Underwriting Requirements
In some states, statutes protect the priority of future advances made pursuant to a letter of credit and reimbursement agreement secured by a mortgage, provided the statutory requirements are complied with in the mortgage instrument. The proposed mortgage instrument and its exhibits must be reviewed to verify compliance with any state statute that protects the priority of advances made pursuant to a letter of credit and letter of credit reimbursement agreement.
The letter of credit must be reviewed to verify that advances are mandatory and that the lender has no right or authority to terminate or limit future advances pursuant to the letter of credit.
Please contact a member of the VATC underwriting staff if you have any questions or concerns regarding whether the mortgage to be insured complies with the state statute addressing future advance mortgages.
Future Advance – Reverse Mortgage Endorsement -14.3
Purpose of Endorsement
The ALTA 14.3 – Future Advance – Reverse Mortgage Endorsement insures against loss resulting from the invalidity and unenforceability of a mortgage that secures any future Advance of money made after the recording of the mortgage pursuant to a loan agreement or a note authorizing future advances. This endorsement also insures against loss resulting from the lack of priority of the lien of the Insured Mortgage as security for each Advance over any other lien or encumbrance.
This particular endorsement is used when the Insured Mortgage is a reverse mortgage,and provides additional coverage against loss resulting when the failure of the mortgagors to be at least 62 years of age at Date of Policy causes the invalidity or unenforceability of the Insured Mortgage.
Underwriting Requirements
State statutes protect the priority of future advances made pursuant to a loan agreement or a note authorizing future advances and secured by a mortgage, provided the statutory requirements are complied with in the mortgage instrument. The proposed mortgage instrument and its exhibits must be reviewed to verify compliance with the specific requirements of any state statute that protects the priority of Advances made pursuant to a future advance loan.
The most common form of reverse mortgage is the HUD Home Equity Conversion Mortgage, where there are actually two mortgages executed by the mortgagors. One of these mortgages runs to the originating lender, and the other runs to HUD. Usually the lender is identified as the Insured on the Loan Policy’s Schedule A, and the HUD mortgage is shown as a subordinate matter in the policy’s Schedule B Part II; but lender instructions may vary.
The mortgage to be insured must also be examined to verify that it is a reverse mortgage. If it is not a HUD Home Equity Conversion Mortgage, please contact a member of VATC’s underwriting staff.
You must also verify that each mortgagor is at least 62 years of age. If this is not the case, this endorsement may not be available. Contact an underwriting counsel at VATC before proceeding with the transaction.
Please contact a member of the VATC underwriting staff if you have any questions or concerns regarding whether the mortgage to be insured complies with the state statute addressing future advance mortgages.
Non-Imputation – Full Equity Transfer Endorsement (15-06)
Purpose of Endorsement
The ALTA 15-06 Non-Imputation – Full Equity Transfer Endorsement, can be used to endorse an Owner’s Policy. It applies in situations where new investors acquire the full equity interest in the entity owning the Land and that entity is named as the Insured in the Owner’s Policy.
The endorsement limits the applicability of policy Exclusions 3(a) (matters created, suffered or assumed by the Insured Claimant), 3(b) (known to the Insured Claimant but not known to the Company) and 3(e) (resulting in loss which would not have been sustained if the Insured Claimant paid value …).
The Company will not assert those Exclusions to deny liability for loss otherwise insured against solely by reason of the action, inaction, or knowledge, at Date of Policy, of other or former stockholders, officers, directors, managers, partners or members of the insured entity, provided that the “incoming” partner, member or stockholder acquired its interest as a purchaser for value without actual knowledge of the matter otherwise insured against. The endorsement is designed for issuance simultaneously with an Owner’s Policy showing the titleholder as the Insured, since it relates to action, inaction or knowledge as of Date of Policy.
Underwriting Requirements
CATIC requires the following in order to issue this endorsement for an Owner’s Policy:
1. Execution of the CATIC Non-Imputation Affidavit and Indemnity Agreement by those persons (Affiants) whose knowledge, action or inaction is covered by the endorsement;
2. You must have a full understanding of the transaction, the extent of the new investors’ participation and the rationale for the endorsement request;
3. The Insured named in Schedule A of the Owner’s Policy and identified in the endorsement must be the record owner;
4. The endorsement must identify the specific persons (e.g., the names of the exiting officers, directors, shareholders, members, or partners) whose knowledge and participation in the insured entity is of concern. The endorsement must also identify the new investors who are concerned about the knowledge and participation of other parties. The names should be specific and should not be general (e.g., do not insert “all officers (or shareholders) of ABC, Inc.”); and
5. VATC Underwriting Counsel must approve the issuance of the endorsement.
Additional Premium
Because of the risks associated with this endorsement, an additional premium is required each time this endorsement is issued. The additional premium is fifteen percent (15%) of the regular gross premium charged. There is no agent split for this endorsement. The entire additional premium shall be remitted to VATC.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Non-Imputation Affidavit and Indemnity Agreement – Corporation Endorsement (15-06, 15.1-06 and 15.2-06)
The ALTA Non-Imputation Endorsements Include the Following Types:
- ALTA 15-06 – Non-Imputation – Full Equity Transfer
- ALTA 15.1-06 – Non-Imputation – Additional Insured
- ALTA 15.2-06 – Non-Imputation – Partial Equity Insured
Underwriting Requirements and Instructions for Use of Affidavit and Indemnity Agreement
A Non-Imputation Endorsement may be issued when requested by the attorney for the Insured after consultation with a member of VATC’s underwriting staff and the Underwriting Requirements for the individual endorsement forms must be followed. In most cases, Non-Imputation Affidavits and Indemnity Agreements (the appropriate forms follow these requirements) must be executed by some or all of the officers, directors, shareholders, members or partners whose knowledge and participation in the existing entity is addressed in the endorsement. For example, where there is an endorsement to an Owner Policy, an Affidavit and Indemnity Agreement must be signed by a principal having a majority interest and management involvement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement or the affidavit and indemnity agreement.
Non-Imputation Affidavit and Indemnity Agreement – LLC (15-06, 15.1-06 & 15.2-06)
The ALTA Non-Imputation Endorsements Include the Following Types:
- ALTA 15-06 – Non-Imputation – Full Equity Transfer
- ALTA 15.1-06 – Non-Imputation – Additional Insured
- ALTA 15.2-06 – Non-Imputation – Partial Equity Insured
Underwriting Requirements and Instructions For Use of Affidavit and Indemnity Agreement
A Non-Imputation Endorsement may be issued when requested by the attorney for the Insured after consultation with a member of CATIC’s underwriting staff and the Underwriting Requirements for the individual endorsement forms must be followed. In most cases, Non-Imputation Affidavits and Indemnity Agreements (the appropriate forms follow these requirements) must be executed by some or all of the officers, directors, shareholders, members or partners whose knowledge and participation in the existing entity is addressed in the endorsement. For example, where there is an endorsement to an Owner Policy, an Affidavit and Indemnity Agreement must be signed by a principal having a majority interest and management involvement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement or the affidavit and indemnity agreement.
Non-Imputation Affidavit and Indemnity Agreement – Partnership (15-06, 15.1-06 & 15.2-06)
The ALTA Non-Imputation Endorsements Include the Following Types:
- ALTA 15-06 – Non-Imputation – Full Equity Transfer
- ALTA 15.1-06 – Non-Imputation – Additional Insured
- ALTA 15.2-06 – Non-Imputation – Partial Equity Insured
Underwriting Requirements and Instructions for Use of Affidavit and Indemnity Agreement
A Non-Imputation Endorsement may be issued when requested by the attorney for the Insured after consultation with a member of CATIC’s underwriting staff and the Underwriting Requirements for the individual endorsement forms must be followed. In most cases, Non-Imputation Affidavits and Indemnity Agreements (the appropriate forms follow these requirements) must be executed by some or all of the officers, directors, shareholders, members or partners whose knowledge and participation in the existing entity is addressed in the endorsement. For example, where there is an endorsement to an Owner Policy, an Affidavit and Indemnity Agreement must be signed by a principal having a majority interest and management involvement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement or the affidavit and indemnity agreement.
Non-Imputation – Additional Insured Endorsement (15.1-06)
Purpose of Endorsement
The ALTA 15.1-06 Non-Imputation – Additional Insured Endorsement can be used to endorse an Owner’s Policy. It applies in situations where a new investor acquires an interest in the Insured identified in the Owner’s Policy (i.e., the record owner) and the endorsement adds an “Additional Insured” (the new investor in that record owner).
Like the ALTA Endorsement 15-06, this endorsement limits the applicability of policy Exclusions 3(a) (matters created, suffered or assumed by the Insured Claimant), 3(b) (known to the Insured Claimant but not known to the Company) and 3(e) (resulting in loss which would not have been sustained if the Insured Claimant paid value …).
The Company will not assert those Exclusions to deny liability for loss otherwise insured against solely by reason of the action, inaction, or knowledge, at Date of Policy, of other or former stockholders, officers, directors, managers, partners or members of the insured entity to the extent of the interest acquired by the “incoming” partner, member or stockholder (the Additional Insured), provided the Additional Insured acquired its interest as a purchaser for value without actual knowledge of the matter otherwise insured against.
Underwriting Requirements
CATIC requires the following in order to issue this endorsement for an Owner’s Policy:
- Execution of the CATIC Non-Imputation Affidavit and Indemnity Agreement by those persons (Affiants) whose knowledge, action or inaction is covered by the endorsement;
- You must have a full understanding of the transaction, the extent of the new investors’ participation and the rationale for the endorsement request;
- The Insured named in Schedule A of the Owner’s Policy and identified in the endorsement must be the record owner, not the new investor in that record owner;
- This endorsement must identify the incoming investor, who is concerned about the knowledge and participation of other parties, as the Additional Insured.
- The endorsement must also identify the specific persons (e.g., the names of the existing or exiting officers, directors, shareholders, members, or partners) whose knowledge and participation in the insured entity is of concern. The names should be specific and should not be general (e.g., do not insert “all officers (or shareholders) of ABC, Inc.”);
- The existing Insured must sign the endorsement, evidencing approval of issuance of the endorsement; and VATC Underwriting Counsel must approve the issuance of the endorsement.
Additional Premium
Because of the risks associated with this endorsement, an additional premium is required each time this endorsement is issued. The additional premium is fifteen percent (15%) of the regular gross premium charged. There is no agent split for this endorsement. The entire additional premium shall be remitted to VATC.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Non-Imputation – Partial Equity Transfer Endorsement (15.2-06)
Purpose of Endorsement
The ALTA 15.2-06 Non-Imputation – Partial Equity Transfer Endorsement can be used to endorse an Owner’s Policy. The endorsement applies in the situation where an investor acquires a partial equity interest in the existing record owner (i.e., a partnership, limited liability company or corporation). The incoming investor, member, partner or shareholder can be named as the Insured in Schedule A of a new Owner’s Policy.
Like the ALTA Endorsements 15-06 and 15.1-06, this endorsement limits the applicability of policy Exclusions 3(a) (matters created, suffered or assumed by the Insured Claimant), 3(b) (known to the Insured Claimant but not known to the Company) and 3(e) (resulting in loss which would not have been sustained if the Insured Claimant paid value …).
The Company will not assert those Exclusions to deny liability for loss otherwise insured against solely by reason of the action, inaction, or knowledge, at Date of Policy, of other or former stockholders, officers, directors, managers, partners or members of the existing entity to the extent of the interest acquired by the “incoming” partner, member or stockholder (the Insured), provided the Insured acquired its interest as a purchaser for value without actual knowledge of the matter otherwise insured against.
Underwriting Requirements
CATIC requires the following in order to issue this endorsement for an Owner’s Policy:
- Execution of the CATIC Non-Imputation Affidavit and Indemnity Agreement by those persons (Affiants) whose knowledge, action or inaction is covered by the endorsement;
- You must have a full understanding of the transaction, the extent of the new investor’s participation and the rationale for the endorsement request;
- The endorsement must identify the incoming investor who is concerned about the knowledge and participation of other parties. This incoming investor should also be named as the Insured in Schedule A of the new Owner’s Policy;
- The endorsement must also identify the specific persons (e.g., the names of the existing or exiting officers, directors, shareholders, members, or partners) whose knowledge and participation in the insured entity is of concern. The names should be specific and should not be general (e.g., do not insert “all officers (or shareholders) of ABC, Inc.”); and
- VATC Underwriting Counsel must approve the issuance of the endorsement and the new Owner Policy.
Additional Premium
Because of the risks associated with this endorsement, an additional premium is required each time this endorsement is issued. The additional premium is fifteen percent (15%) of the regular gross premium charged. There is no agent split for this endorsement. The entire additional premium shall be remitted to VATC.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Access and Entry Endorsement (17-06)
Purpose of Endorsement
The ALTA 17-06 Access and Entry Endorsement insures against loss resulting when the insured parcel lacks access to a public road. The endorsement is available when the property abuts and has access to a public road and when there is no legal or physical obstruction prohibiting the property owner from gaining pedestrian and vehicular access to the insured parcel. It is not to be issued where access is by way of a private way. In that case, the use of the Indirect Access and Entry Endorsement (ALTA Endorsement 17.1-06) may be appropriate.
Underwriting Requirements
The Land must have actual pedestrian and vehicular access to and from the public road designated in the endorsement, and the road must be physically open and maintained by the town, the state, or some other governmental entity. Finally, if there are existing curb cuts or entries along the road adjoining the property, the Insured must have the right to use these. All of these conditions must exist in order for this endorsement to be added to the policy.
In the endorsement, you will add the name of the public road adjoining the insured property in the first paragraph of the endorsement. In those cases where the parcel adjoins more than one public road, the public road referenced in the endorsement will be the one actually utilized for access purposes. If the parcel has been developed within the past year or remains undeveloped, please verify whether any required permits have been issued for curb cuts or existing entries along the road.
Contact a member of VATC’s underwriting staff if the inspection, search, survey or map indicates the existence of any of the following matters:
- An uninsured parcel of land or any other gap existing between the insured parcel and the adjoining public road.
- The street, even though shown on the map, is a “paper street” and is not physically open.
- Rights of access condemned or conveyed with respect to land lying between the insured parcel and the street.
- Covenants, conditions and restrictions which may restrict rights of access.
- Metes and bounds description which fails to tie to the street.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Indirect Access and Entry Endorsement (17.1-06)
Purpose of Endorsement
The ALTA 17.1-06 Indirect Access and Entry Endorsement insures against loss resulting when the insured parcel cannot access a public road by way of a private right of way or easement referred to in the endorsement.
The easement must provide the Land with actual pedestrian access to the public road and that public road must be open and publicly maintained. The access to and from the public road must be by way of a specific easement identified in the endorsement or in the policy’s Schedule A. The Insured must also have the right to use existing curb cuts or entries along the portion of the public road abutting the easement.
Underwriting Requirements
In order to issue this endorsement:
- A title search must confirm that the insured parcel has the benefit of an easement granted of record for access over a private road that ultimately provides access to a public road;
- Both the easement parcel and the public road must be identified in the first paragraph of the endorsement; and
- The title search should include a search of the servient estate to confirm that there are no interests or encumbrances which are prior in right to the easement. If such prior interests or encumbrances do exist and continue to affect the servient estate, these must be either released, subordinated to the easement, or referred to in the policy’s Schedule B.
- If this road has been created within the past year or the insured parcel is undeveloped, please verify that any needed governmental permits have been obtained for curb cuts or entries along the portion of the public road abutting the easement.
If there is no express easement, the endorsement may be used if the Land has an implied easement recognized by state law, but you must discuss the insurability of the implied easement with a member of VATC’s underwriting staff prior to issuing the endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Single Tax Parcel And ID – 18.3-06
Purpose of Endorsement
The ALTA 18.3-06 Single Tax Parcel and ID Endorsement insures against loss resulting when the insured property fails to constitute a separate tax parcel for real estate taxes or if any portion of the insured property is not assessed for real estate taxes under the tax identification number designated in the endorsement. The endorsement is not available in situations where the insured parcel is comprised of more than one tax parcel or where the land is taxed together with other land that is not included in the insured property, nor is the endorsement available in situations where there is no tax identification number assigned to the parcel, or where there appear to be multiple tax identification numbers associated with the property.
Underwriting Requirements
In order to use this endorsement, you must obtain and review the municipal assessor’s records to determine the fact that all of the insured property is assessed and taxed as a single and separate tax parcel with a single tax identification number.
When the land is comprised of more than one tax parcel with multiple tax identification numbers, the appropriate endorsement to use is either the ALTA 18.1-06 Multiple Tax Parcel Endorsement or the ALTA 18.2-06 Multiple Tax Parcel Endorsement.
Please contact a member of CATIC’s underwriting staff if there are questions about the issuance of this endorsement.
Contiguity – Multiple Parcels Endorsement (19-06)
Purpose of Endorsement
The ALTA 19-06 Contiguity – Multiple Parcels Endorsement is used where the policy’s Property Description includes two or more parcels of property and the lender or owner wants coverage against loss caused by the failure of the parcels to be contiguous.
This endorsement can be used only when the Land is comprised of two or more parcels, and there is at least one common contiguous boundary between the parcels. The method of completing this particular endorsement requires stating something similar to “the failure of the easterly boundary of Lot A to be contiguous to the westerly boundary of Lot B ….” In other words, the endorsement must refer to specific boundaries.
If the Land consists of one parcel, then the Contiguity Endorsement to use in that case is the ALTA 19.1-06 Contiguity – Single Parcel.
Underwriting Requirements
To issue the endorsement, the agent must ascertain that the parcels of the property included in the Property Description share one or more common, contiguous boundaries.
- To include this endorsement on an Owner’s Policy, there must be a current ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, that shows that the parcels comprising the insured property are contiguous along the specific boundaries referred to in numbered paragraph 1 of the endorsement. If a survey is available but it is not current or is not certified to CATIC, there is an extra premium charge for this endorsement. If there is no survey showing the common boundaries, this endorsement is not available for an Owner Policy.
- To include this endorsement on a Loan Policy, there must be either: (1) a survey such as the one referred to above; or (2) a Property Description clearly describing the parcels as bounded by one another along the specific boundaries referred to in numbered paragraph 1 of the endorsement. If there is no current survey certified to CATIC available, then there is an additional premium charge for this endorsement.
In either case, there must be no strips of land, passageways, easements, roads or other gaps separating the parcels from one another.
- Please complete the endorsement by specifically identifying the contiguous boundaries in numbered paragraph 1 of the endorsement.
Additional Premium
Because of the risks associated with this endorsement, an additional premium is required each time this endorsement is issued unless a current survey certified to CATIC is provided showing that the parcels comprising the Land are contiguous along any boundary line to be referred to in the endorsement. The additional premium is ten percent (10%) of the regular, gross premium charged.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Contiguity – Single Parcel Endorsement (19.1-06)
Purpose of Endorsement
The ALTA 19.1-06 Contiguity – Single Parcel Endorsement is used when the Land is a single parcel and the lender or owner wants coverage against loss caused by the failure of the Land to be contiguous with an adjoining property along a common boundary.
The endorsement must refer to the adjoining parcel and specify the common boundary between the Land and that parcel. For example, the endorsement could insure against the “failure of the Land to be contiguous to property shown as Parcel 2B, 2.54 acres, on a map entitled ‘Map of Haven Industrial Park’ along the northerly boundary of the Land.”
Underwriting Requirements
To issue the endorsement, the agent must ascertain that the Land included in the Property Description shares a common boundary with an adjoining parcel.
- To include this endorsement on an Owner’s Policy, there must be a current ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, showing that the Land and the other parcel identified in the endorsement are contiguous along the common boundary line referred to in numbered paragraph 1 of the endorsement. If there is a current survey certified to CATIC showing the common boundary referred to in the endorsement, then there is no additional charge for the endorsement. If the survey is not current or is not certified to CATIC, then there is an extra premium charge for the endorsement. If there is no survey showing the common boundary, the endorsement is not available for an Owner Policy.
- To include this endorsement on a Loan Policy, there must be either: (1) a survey such as the one referred to above; or (2) a property description of the Land clearly describing the Land as bounded by the adjoining parcel along the common boundary line referred to in numbered paragraph 1 of the endorsement. If there is no current survey certified to CATIC available, then there is an additional premium charge for this endorsement.
In either case, there must be no strips of land, passageways, easements or roads or other gaps separating the parcels from one another.
Please complete the endorsement by specifically identifying the adjoining parcel as well as the common, contiguous boundary line identified in the endorsement.
Additional Premium
Because of the risks associated with this endorsement, an additional premium is required each time this endorsement is issued unless a current survey certified to CATIC is provided showing that the Land and the other parcel to be identified in the endorsement are contiguous along the boundary to be referred to in the endorsement. The additional premium is ten percent (10%) of the regular, gross premium charged.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Contiguity – Specified Parcels (19.2-06)
Purpose of Endorsement
The ALTA 19.2-06 Contiguity – Specified Parcels Endorsement is used where the policy’s Property Description includes two or more parcels of property and the lender or owner wants coverage against loss caused by the failure of the parcels specified in the endorsement to be contiguous.
Underwriting Requirement
To issue the endorsement, you must ascertain that the parcels of the property included in the policy’s Property Description share at least one common boundary. Only those parcels sharing a common boundary can be identified in the endorsement.
- To include this endorsement on an Owner Policy, there must be a current ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, showing that two or more of the parcels comprising the insured property and referred to in the endorsement share at least one common boundary. If there is a current survey certified to CATIC showing the common boundary referred to in the endorsement, then there is no additional charge for the endorsement. If the survey is not current or is not certified to CATIC, then there is an extra premium charge for the endorsement. If there is no survey showing the common boundary, the endorsement is not available for an Owner Policy.
- To include this endorsement on a Loan Policy, there must be either: (1) a survey such as the one referred to above; or (2) a description of the property clearly describing the parcels referred to in the endorsement as bounded by one another along at least one common boundary. If there is no current survey certified to CATIC available, then there is an additional charge for this endorsement.
In either case, there must be no strips of land, passageways, easements, roads, gaps or gores separating any of the contiguous parcels identified in the endorsement from one another. If the parcels comprising the land are not contiguous along at least one common border, or you have information that there are or may be gaps or gores between the adjoining parcels, discuss the completion of the form with a member of CATIC’s underwriting staff prior to issuing the endorsement.
Additional Premium
Because of the risks associated with this endorsement, an additional premium is required each time this endorsement is issued unless a current survey certified to CATIC is provided showing that the parcels to be identified in the endorsement are contiguous along a common boundary. The additional premium is ten percent (10%) of the regular, gross premium charged.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
First Loss Payable (20-06)
Purpose of Endorsement
The ALTA 20-06 First Loss Payable Endorsement can only be used to endorse a Loan Policy, and is available when the Insured Mortgage encumbers more than one tract of land.
Ordinarily, in order to establish a loss under a Loan Policy, the insured mortgagee must foreclose on all of its security. There are circumstances in which the existence of an encumbrance prior in right to the Insured Mortgage will not result in a loss to the Insured, because the value of the insured property is sufficient to satisfy both the encumbrance for which no exception was taken and the Insured Mortgage.
This endorsement provides that if a lien, defect or encumbrance insured against by the policy results in a loss to the Insured that exceeds 10% of the amount of the policy, the Insured need not foreclose on all of its security in order to recover under the policy for the resulting loss. The Company retains the right of reimbursement in the event the Insured recovers any amounts through other security.
Underwriting Requirements
In order to use this endorsement, there must be one mortgage encumbering more than one parcel.
A member of VATC’s underwriting staff must review and approve this endorsement prior to issuance.
The endorsement is unavailable when a mortgage encumbers properties in a state where the law prohibits foreclosing on fewer than all of the parcels encumbered by the mortgage. It is also unavailable where the law requires acceleration of the entire debt in the event of a default.
Additional Premium
Because of the risks associated with this endorsement, an additional premium is required each time this endorsement is issued. The additional premium is ten percent (10%) of the regular, gross premium charged. There is no agent split on this endorsement. The entire additional premium shall be remitted to VATC.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Location Endorsement (22-06)
Purpose of Endorsement
The ALTA 22-06 Location Endorsement, also known as the Address or Street Address Endorsement, insures against loss caused by the failure of the improvement identified in the endorsement, and known by its street address designated in the endorsement, to be located on the Land at Date of Policy.
Underwriting Requirements
Issuing this endorsement requires a description of the improvement located on the Land at Date of Policy and the address of the property to be inserted into the first paragraph of the endorsement. The description of the improvement for purposes of this endorsement is concise, such as “warehouse” or “office building.”
This endorsement can be incorporated by reference in a Standard Loan Policy by checking the appropriate box at the bottom of the policy’s Schedule B.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Location and Map Endorsement (22.1-06)
Purpose of Endorsement
The ALTA 22.1-06 Location and Map Endorsement insures against loss caused by the failure of the improvement identified in the endorsement, and known by its street address designated in the endorsement, to be located on the Land at Date of Policy. This endorsement also insures against loss caused by the failure of any map attached to the policy to correctly show the location and dimensions of the Land.
Underwriting Requirements
Issuing this endorsement requires a concise description of the improvement located on the Land at Date of Policy, as well as the property address, to be inserted into the first paragraph of the endorsement. This form should be used only where there is an existing survey of the property and that survey shows the correct location and dimensions of the insured property. Once this is confirmed, the survey map should be attached to either the policy or the endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Doing Business Endorsement (24-06)
Purpose of Endorsement
The ALTA 24-06 Doing Business Endorsement insures against loss resulting from the invalidity or unenforceability of the lien of the Insured Mortgage because the Insured Mortgage violates the doing business laws of the state where the mortgage is recorded.
Underwriting Requirements
Since the endorsement insures against loss caused by a violation of doing business laws, the endorsement is only available when:
- the mortgage does not violate the state’s doing business laws; or
- the doing business laws do not apply to the mortgage or the transaction.
For example, some state laws provide that securing a loan with a mortgage will not be considered “doing business” in certain circumstances. Generally, the form can be used only when the policy insures a commercial mortgage.
Please contact a member of VAC’s underwriting staff if there are questions about the issuance of this endorsement.
Subdivision Endorsement – 26
Purpose of Endorsement
The ALTA 26 – Subdivision Endorsement insures against loss if the Land does not constitute a lawfully created parcel under state subdivision statutes and local subdivision ordinances.
Underwriting Requirements
In order to use this endorsement, either:
- the land must be an approved subdivision lot; or
- the land must be considered a subdivision lot under state law because it has been grandfathered or validated; or subdivision laws must not apply to the existing property.
- This form can be used, for example, where the lot is shown on an approved subdivision map filed in the appropriate record.
If there is any question about whether the insured property constitutes an valid subdivision lot, please contact a member of CATIC’s underwriting staff prior to issuing the endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Usury Endorsement – 27
Purpose of Endorsement
The ALTA 27 Usury Endorsement insures against loss when the Insured Mortgage is invalid or unenforceable because it violates the applicable state usury laws.
Underwriting Requirements
This form can be used if:
- the mortgage complies with the state’s usury laws; or
- the mortgage is exempt from the state’s usury laws.
Some states, for example, exempt certain types of mortgage transactions, or exempt mortgages securing loans in excess of a certain amount.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Easement – Damage or Enforced Removal Endorsement (28-06)
Purpose of Endorsement
The ALTA 28-06 Easement – Damage or Enforced Removal Endorsement insures against loss caused when the exercise of a right to use or maintain an easement referred to in the endorsement results in the damage or the forced removal of a building located on the Land at Date of Policy.
Underwriting Requirements
Insert the Exception numbers in the policy’s Schedule B, corresponding to the easements that the endorsement will address, to the first paragraph of the endorsement.
LOAN POLICY: Obtain a properly executed Owner’s Affidavit (CATIC A-100) confirming that there are no present encroachments. A current ALTA survey certified to CATIC or map acceptable to CATIC showing the location of existing easements and improvements is required when the Amount of Insurance is over $5,000,000.00.
OWNER POLICY: A current ALTA survey certified to CATIC or map acceptable to CATIC showing the location of existing easements and improvements is required when issuing this endorsement for a Standard Owner Policy.
NOTE: If your inquiry or the survey reveals that there is an encroachment of any kind, please contact a member of VATC’s underwriting staff prior to issuing the endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Encroachments – Boundaries and Easements Endorsement – 28.1
Purpose of Endorsement
The ALTA 28.1 – Encroachments – Boundaries and Easements Endorsement insures against loss or damage caused when an existing improvement located on the Land encroaches over the boundary lines or into any easement affecting the property, or where there is an encroachment of an improvement from an adjoining parcel into the insured property. The endorsement also insures against the risk of loss when the exercise of easement rights causes damage to or the forced removal of existing improvements.
Underwriting Requirements
LOAN POLICY: Obtain a properly executed Owner’s Affidavit (CATIC A-100) confirming that there are no present encroachments. A current ALTA survey certified to CATIC or map acceptable to CATIC showing the location of existing easements and improvements is required when the Amount of Insurance is over $5,000,000.00.
OWNER POLICY: A current ALTA survey certified to CATIC or map acceptable to CATIC showing the location of existing easements and improvements is required when issuing this endorsement for a Standard Owner Policy.
NOTE: If your inquiry or the survey reveals that there is an encroachment of an improvement over a boundary line or into an easement, then an Exception for this encroachment must be added in the Schedule B of the policy and the Exception number for that encroachment must also be identified in Section 4 of this endorsement. If there are no encroachments, you may insert “None” at the end of Section 4.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Encroachments – Boundaries and Easements – Described Improvements – 28.2
Encroachments – Boundaries and Easements – Described Improvements and Land Under Development Endorsement (28.3-06)
Purpose of Endorsement
The ALTA 28.3-06 Boundaries and Easements – Described Improvements and Land Under Development Endorsement covers loss caused when either an Improvement existing on the Land at Date of Policy or a Future Improvement encroaches over the boundary lines or into any easement affecting the insured property, or where there is an encroachment of an Improvement from an adjoining parcel into the insured property. The endorsement also insures against the risk of loss when the exercise of easement rights causes damage to or the forced removal of either an existing Improvement or a Future Improvement.
The endorsement defines Improvement as a building, structure or paved area, existing on the Land or adjoining land at Date of Policy. The endorsement also defines Future Improvement as one shown on a Plan identified in the endorsement.
Underwriting Requirements
To issue this endorsement, there must be a current ALTA survey certified to CATIC or other survey acceptable to CATIC which locates any structures in existence at the Date of Policy as well as any improvements that are proposed to be built on the Land. This survey (referred to as the “Plan”) must be specifically identified in Section 2c. of the endorsement.
NOTE: If your inquiry or the Plan reveals that there is an encroachment of an improvement over a boundary line or into an easement, then an Exception for this encroachment must be added in the Schedule B of the policy and the Exception number for that encroachment must also be identified in Section 4 of this endorsement. If there are no encroachments, you may insert “None” at the end of Section 4.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Interest Rate Swap – Direct Obligation Endorsement (29-06)
Purpose of Endorsement
The ALTA 29-06 Interest Rate Swap – Direct Obligation Endorsement insures against loss by reason of the invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as security for the repayment of Swap Obligation at Date of Endorsement.
Swap Obligation means a monetary obligation under an existing interest rate exchange agreement referred to in the endorsement and secured by the Insured Mortgage.
Underwriting Requirements
This form can be used where the mortgage by its terms secures sums or obligations under an interest rate swap agreement that is specifically identified in Section 1b. of the endorsement.
Verify that the mortgage to be insured expressly secures an existing Swap Obligation evidenced by an existing interest rate exchange agreement. Confirm that the mortgage establishes a maximum amount of the Swap Obligation.
Add the Date of Endorsement. For example, the Date of Endorsement will be the same as the Date of Policy if the endorsement is issued with the policy. If the Date of Endorsement will be subsequent to Date of Policy, contact a member of VATC’s underwriting staff for additional requirements.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Interest Rate Swap – Additional Interest Endorsement (29.1-06)
Purpose of Endorsement
The ALTA 29.1-06 Interest Rate Swap – Additional Interest Endorsement insures against loss by reason of the invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as security for repayment of Additional Interest.
Additional Interest is defined in the endorsement as additional interest calculated pursuant to a formula provided in the loan documents secured by the Insured Mortgage at Date of Endorsement for repayment of the Swap Obligation.
Swap Obligation means a monetary obligation under an existing interest rate exchange agreement referred to in the endorsement and secured by the Insured Mortgage.
The ALTA 29.1-06 can be used where a monetary obligation under the interest rate exchange agreement is characterized as additional interest and secured by the mortgage.
Underwriting Requirements
Confirm that the obligations secured by the Insured Mortgage include the Additional Interest.
Verify that the mortgage to be insured expressly secures an existing Swap Obligation, evidenced by an interest rate exchange agreement. Confirm that the mortgage establishes a maximum amount of the Swap Obligation.
Add the Date of Endorsement. For example, the Date of Endorsement will be the same as the Date of Policy if the endorsement is issued with the policy. If the Date of Endorsement will be subsequent to the Date of Policy, contact a member of VATC’s underwriting staff for additional requirements.
Additional Premium
Because of the risks associated with this endorsement, an additional premium is required each time this endorsement is issued. The additional premium is ten percent (10%) of the regular, gross premium charged.
Interest Rate Swap – Direct Obligation – Defined Amount Endorsement (29.2-06)
Purpose of Endorsement
The ALTA 29.2-06 Interest Rate Swap – Direct Obligation – Defined Amount Endorsement insures against loss not to exceed the Additional Amount of Insurance by reason of the invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as security for the repayment of the Swap Obligation.
Swap Obligation means a monetary obligation under an existing interest rate exchange agreement referred to in the endorsement and secured by the Insured Mortgage.
The ALTA 29.2-06 can be used where the mortgage being insured directly secures the repayment of the monetary obligation under the interest rate exchange agreement. The form provides coverage up to an Additional Amount of Insurance designated in the endorsement.
Underwriting Requirements
Verify that the mortgage to be insured expressly secures an existing Swap Obligation, evidenced by an interest rate exchange agreement. Confirm that the Insured Mortgage states the additional amount to be secured under a swap agreement or the interest rate exchange agreement, in addition to the loan amount. Insert this amount as the Additional Amount of Insurance in Section 1c. of the endorsement.
Add the Date of Endorsement. For example, the Date of Endorsement will be the same as the Date of Policy if the endorsement is issued with the policy. If the Date of Endorsement will be subsequent to the Date of Policy, contact a member of CATIC’s underwriting staff for additional requirements.
Additional Premium
Because of the risks associated with this endorsement, an additional premium is required each time this endorsement is issued. The additional premium is equal to (1) ten percent (10%) of the regular gross premium charged for the underlying Loan Policy based upon the Amount of Insurance stated in the Policy’s Schedule A; and (2) the premium required for the Additional Amount of Insurance.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Shared Appreciation Mortgage Endorsement 30
Purpose of Endorsement
The ALTA 30 – Shared Appreciation Mortgage Endorsement provides coverage for increases in the indebtedness secured by the Insured Mortgage by reason of shared equity or an appreciation in the value of land. This endorsement insures against loss or damage as a result of the invalidity or unenforceability of the Insured Mortgage as security for the shared appreciation indebtedness, and also insures against loss resulting from the loss of priority of the Insured Mortgage as security for the shared appreciation indebtedness. This endorsement is available for loan policies insuring mortgages that encumber one-to-four family residential dwellings.
Underwriting Requirements
Prior to issuing the endorsement, you must ascertain that the property is a one-to-four family residence and confirm that the mortgage to be insured contains shared equity or appreciation language.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Commercial Participation Interest Endorsement – 30.1
Purpose of Endorsement
The ALTA 30.1 – Commercial Participation Interest Endorsement provides coverage for commercial loan transactions which include a participation interest based on either the borrower’s equity, or an increase in value of the title, or cash flow. This Endorsement insures against loss due to the invalidity or unenforceability of the Insured Mortgage resulting from mortgage or loan provisions providing for a participation interest, and also insures against loss resulting from the lack of priority of the Insured Mortgage caused by provisions in the loan documents for payment or allocation of any participation interest.
Underwriting Requirements
Prior to issuing this endorsement, you must review the mortgage to be insured and any loan documents referred to in the mortgage to verify the inclusion of participation interest language.
This Endorsement must be approved by a member of VATC’s underwriting staff prior to issuance.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Construction Loan – Loss of Priority Endorsement – 32
Purpose of Endorsement
The ALTA 32 – Construction Loan – Loss of Priority Endorsement insures against: (1) the invalidity or unenforceability of the lien of the Insured Mortgage as security for each Construction Loan Advance made on or before Date of Coverage; (2) the lack of priority of the lien of the Insured Mortgage as security for each Construction Loan Advance made on or before Date of Coverage over any lien or encumbrance recorded in the Public Records and not shown on Schedule B; and (3) the lack of priority of the lien of the Insured Mortgage as security for each Construction Loan Advance made on or before Date of Coverage over any Mechanic’s Lien, if notice of the Mechanic’s Lien is not filed or recorded in the Public Records, but only to the extent that the charges for which the Mechanic’s Lien is claimed were designated for payment in the documents supporting the Construction Loan Advance disbursed by or on behalf of the Insured on or before Date of Coverage.
This endorsement can be used in a state where periodic disbursements made pursuant to a construction loan may not have priority over liens or encumbrances intervening between the recording of the Insured Mortgage and the disbursement.
Underwriting Requirements
- Review the title search of the property to confirm that there are no recorded mechanics’ liens or any other recorded lien for labor or materials;
- Obtain a signed Owner’s Affidavit (CATIC A-100) verifying that no work has been done or material furnished on the subject property within the preceding time period where a mechanic’s lien or other statutory lien for labor or materials could exist in unrecorded form;
- Confirm whether there is pending work to be completed or there have been outstanding contracts executed prior to the Date of Coverage;
- Obtain mechanics’ lien waivers or subordinations acceptable to CATIC if work on the property has already commenced;
- On the policy, insert this pending disbursement clause into the policy’s Schedule B:
Pending disbursement of the full proceeds of the loan secured by the mortgage set forth under Schedule A hereof, this policy insures only to the extent of the amount actually disbursed, but increases as each disbursement is made in good faith and without knowledge of any defects in, or objections to, the title up to the face amount of the policy. At the time of each disbursement of the proceeds of the loan, the title must be continued down to such time for possible liens or objections intervening between the date hereof and the date of such disbursement.
6. Insert the Date of Coverage into the endorsement. For example, if the endorsement is issued at the same time as the policy, the Date of Coverage and Date of Policy will be the same. If the Date of Coverage is going to be subsequent to the Date of Policy, contact a member of CATIC’s underwriting staff.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Construction Loan – Direct Payment – 32.1
Construction Loan – Insured’s Direct Payment Endorsement – 32.2
Minerals and Other Subsurface Substances Endorsement (35-06)
Purpose of Endorsement
The ALTA 35-06 Minerals and Other Subsurface Substances Endorsement covers loss resulting when there is damage to any existing building located on the Land at Date of Policy caused by the exercise of the right to use the surface of the Land for the extraction or development of minerals and other subsurface substances.
Underwriting Requirements
The underwriting for this endorsement involves reviewing any title document allowing another party to extract or develop minerals and other subsurface substances. The endorsement is available if there is no such right, or if the right prohibits the use of the land surface. If a right exists in a third party to extract or develop minerals and other subsurface substances, and the right includes the ability to use the surface of the Land, then the right must be noted as a numbered Exception in Schedule B of the policy and the Exception number corresponding to that right must also be specifically referenced in Section 4c. of the endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Minerals and Other Subsurface Substances – Improvements Endorsement (35.1-06)
Purpose of Endorsement
The ALTA 35.1-06 Minerals and Other Subsurface Substances – Improvements Endorsement covers loss resulting from damage to any Improvement located on the Land at Date of Policy caused by the exercise of the right to use the surface of the Land for the extraction or development of minerals and other subsurface substances. The term Improvement is defined in the endorsement and includes not only buildings but also other man-made improvements, such as paved roads and walkways.
Underwriting Requirements
The underwriting for this endorsement involves reviewing any title document allowing another party to extract or develop minerals and other subsurface substances. The endorsement is available if there is no such right, or if the right prohibits the use of the land surface. If a right exists in a third party to extract or develop minerals and other subsurface substances, and the right includes the ability to use the surface of the Land, then the right must be noted as a numbered Exception in Schedule B of the policy and the Exception number corresponding to that right must also be specifically referenced in Section 4c. of the endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Minerals and Other Subsurface Substances – Described Improvements Endorsement (35.2-06)
Purpose of Endorsement
The ALTA 35.2-06 Minerals and Other Subsurface Substances – Described Improvements Endorsement covers loss resulting from damage to existing improvements located on the Land and specifically described in the endorsement caused by the exercise of the right to use the surface of the Land for the extraction or development of minerals and other subsurface substances.
Underwriting Requirements
The endorsement requires describing specific improvements in Section 2 of the form.
The underwriting for this endorsement involves reviewing any title document allowing another party to extract or develop minerals and other subsurface substances. The endorsement is available if there is no such right, or if the right prohibits the use of the land surface. If a right exists in a third party to extract or develop minerals and other subsurface substances, and the right includes the ability to use the surface of the Land, then the right must be noted as a numbered Exception in Schedule B of the policy and the Exception number corresponding to that right must also be specifically referenced in Section 4c. of the endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Minerals and Other Subsurface Substances – Land Under Development Endorsement (35.3-06)
Purpose of Endorsement
The ALTA 35.3-06 Minerals and Other Subsurface Substances – Land Under Development Endorsement covers loss resulting from damage to either an existing Improvement or a Future Improvement caused by the exercise of the right to use the surface of the Land for the extraction or development of minerals and other subsurface substances.
The endorsement defines Future Improvement as one shown on a Plan identified in the endorsement.
Underwriting Requirements
The underwriting for this endorsement involves reviewing any title document allowing another party to extract or develop minerals and other subsurface substances. The endorsement is available if there is no such right, or if the right prohibits the use of the land surface. If a right exists in a third party to extract or develop minerals and other subsurface substances, and the right includes the ability to use the surface of the Land, then the right must be noted as a numbered Exception in Schedule B of the policy and the Exception number corresponding to that right must also be specifically referenced in Section 4c. of the endorsement.
To issue this endorsement, there must be a currently dated ALTA survey certified to CATIC, or other plan acceptable to CATIC, which locates any structures in existence at the Date of Policy as well as any improvements that are proposed to be built on the Land. This survey or plan (referred to as the “Plans”) must be specifically identified in Section 2c. of the endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Energy Project – Leasehold/Easement – Owner’s Endorsement (36-06)
Purpose of Endorsement
This endorsement is part of a series of endorsements designed specifically for energy projects (e.g., wind farms, solar farms, traditional electricity generating facilities, etc.). Such projects may include fee parcels, leaseholds, and/or easements.
This endorsement includes coverage for insured leasehold estates and/or easement interests utilized to create rights in the land for some or all of the project improvements.
The ALTA 36-06 is designed for policies that insure an easement or an easement and a lease. The ALTA 36-06 is designed for use with an Owner’s Policy.
This endorsement contains an expansive definition of “Electricity Facility” that includes an existing electricity generating facility and an electricity generating facility under construction or to be built on the land in locations according to defined “Plans” depicting the project. This endorsement also contains a definition of existing and future “Severable Improvements” linked to the definition of Electricity Facility and the Plans.
The endorsement provides that, in the event of an eviction, the calculation of loss shall include the diminution in value of the Insured’s interest in any existing or future Severable Improvements.
This endorsement contains a definition of “Constituent Parcel.” The endorsement provides that, in the event of an eviction caused by a covered matter affecting any Constituent Parcel, the computation of loss or damage resulting from the eviction shall include loss or damage to the integrated project.
This endorsement provides that the Insured Claimant shall have the right to have the Electricity Facility and the Leasehold Estate and/or Easement Estate (as applicable) valued either as a whole or separately.
Similar to the Leasehold Endorsements, this endorsement has an exclusion clarifying that it excludes costs of remediation resulting from environmental damage or contamination.
Underwriting Requirements
- The project must involve an electricity generating facility (e.g., wind farms, solar farms, traditional electricity generating facilities, etc.). The electricity facility can be existing or to be built or under construction.
- This endorsement is designed primarily for a policy insuring an energy project under construction or to be built. However, it can be used for an existing, completed energy project with appropriate modification to the definitions of Electricity Facility and Severable Improvement, and deletion of the references to the Plans.
- If the project is to be built or under construction, obtain and retain a set of the plans for the project (survey, site and elevation plans or other depictions or drawings prepared by an architect or engineer), and such plans must be referenced in Section 2j. of the endorsement. If the project is completed or existing, and no construction is contemplated, you may waive the requirement of the plans, and modify the endorsement to delete the reference to the Plans.
- Obtain a current, accurate ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, which shows the location of: (a) all existing improvements and all proposed improvements, based upon the Plans defined in the endorsement; and (b) all existing and proposed setback lines. If the project is completed or existing, the survey must show all existing improvements and existing setback lines.
- An easement must be insured on Schedule A. A lease may also be insured on Schedule A.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Energy Project – Leasehold/Easement – Loan Endorsement (36.1-06)
Purpose of Endorsement
The ALTA 36.1-06 Energy Project – Leasehold/Easement – Loan Endorsement is one of a series of endorsements designed specifically for energy projects (e.g., wind farms, solar farms, traditional electricity generating facilities, etc.). Such projects may include fee parcels, leaseholds, and/or easements.
This endorsement includes coverage for insured leasehold estates and/or easement interests utilized to create rights in the land for some or all of the project improvements.
The ALTA 36.1-06 is designed for policies that insure an easement or an easement and a lease. The ALTA 36.1-06 is designed for use with a Loan Policy.
This endorsement contains an expansive definition of “Electricity Facility” that includes an existing electricity generating facility and an electricity generating facility under construction or to be built on the land in locations according to defined “Plans” depicting the project. This endorsement also contains a definition of existing and future “Severable Improvements” linked to the definition of Electricity Facility and the Plans.
The endorsement provides that, in the event of an eviction, the calculation of loss shall include the diminution in value of the Insured’s interest in any existing or future Severable Improvements.
This endorsement contains a definition of “Constituent Parcel.” The endorsement provides that, in the event of an eviction caused by a covered matter affecting any Constituent Parcel, the computation of loss or damage resulting from the eviction shall include loss or damage to the integrated project.
This endorsement provides that the Insured Claimant shall have the right to have the Electricity Facility and the Leasehold Estate and/or Easement Estate (as applicable) valued either as a whole or separately.
Similar to the Leasehold Endorsements, this endorsement has an exclusion clarifying that it excludes costs of remediation resulting from environmental damage or contamination.
Underwriting Requirements
- The project must involve an electricity generating facility (e.g., wind farms, solar farms, traditional electricity generating facilities, etc.). The electricity facility can be existing or to be built or under construction.
- This endorsement is designed primarily for a policy insuring an energy project under construction or to be built. However, it can be used for an existing, completed energy project with appropriate modification to the definitions of Electricity Facility and Severable Improvement, and deletion of the references to the Plans.
- If the project is to be built or under construction, obtain and retain a set of the plans for the project (survey, site and elevation plans or other depictions or drawings prepared by an architect or engineer), and such plans must be referenced in Section 2j. of the endorsement. If the project is completed or existing, and no construction is contemplated, you may waive the requirement of the plans, and modify the endorsement to delete the reference to the Plans.
- Obtain a current, accurate ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, which shows the location of: (a) all existing improvements and all proposed improvements, based upon the Plans defined in the endorsement; and (b) all existing and proposed setback lines. If the project is completed or existing, the survey must show all existing improvements and existing setback lines.
- An easement must be insured on Schedule A. A lease may also be insured on Schedule A.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Energy Project – Leasehold Owner’s & Energy Project – Leasehold – Loan Endorsements (36.2-06 & 36.3-06)
Purpose of Endorsement
These endorsements are part of a series of endorsements designed specifically for energy projects (e.g., wind farms, solar farms, traditional electricity generating facilities, etc.). Such projects may include fee parcels, leaseholds, and/or easements. They include coverage for insured interests utilized to create rights in the land for some or all of the project improvements.
The ALTA 36.2-06 and ALTA 36.3-06 are designed for policies that insure a lease, but not an easement. The ALTA 36.2-06 is designed for use with an Owner’s Policy. The ALTA 36.3-06 is designed for use with a Loan Policy.
These endorsements contain an expansive definition of “Electricity Facility” that includes an existing electricity generating facility and an electricity generating facility under construction or to be built on the land in locations according to defined “Plans” depicting the project. These endorsements also contain a definition of existing and future “Severable Improvements” linked to the definition of Electricity Facility and the Plans.
These endorsements provide that, in the event of an eviction, the calculation of loss shall include the diminution in value of the Insured’s interest in any existing or future Severable Improvements.
These endorsements contain a definition of “Constituent Parcel.” These endorsements provide that, in the event of an eviction caused by a covered matter affecting any Constituent Parcel, the computation of loss or damage resulting from the eviction shall include loss or damage to the integrated project.
These endorsements provide that the Insured Claimant shall have the right to have the Electricity Facility and the Leasehold Estate valued either as a whole or separately.
Similar to the Leasehold Endorsements, these endorsements have an exclusion clarifying that the coverage excludes costs of remediation resulting from environmental damage or contamination.
Underwriting Requirements
- The project must involve an electricity generating facility (e.g., wind farms, solar farms, traditional electricity generating facilities, etc.). The electricity facility can be existing or to be built or under construction.
- These endorsements are designed primarily for a policy insuring an energy project under construction or to be built. However, they can be used for an existing, completed energy project with appropriate modification to the definitions of Electricity Facility and Severable Improvement, and deletion of the references to the Plans.
- If the project is to be built or under construction, obtain and retain a set of the plans for the project (survey, site and elevation plans or other depictions or drawings prepared by an architect or engineer), and such plans must be referenced in Section 2g. of the endorsement. If the project is completed or existing, and no construction is contemplated, you may waive the requirement of the plans, and modify the endorsement to delete the reference to the Plans.
- Obtain a current, accurate ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, which shows the location of: (a) all existing improvements and all proposed improvements, based upon the Plans defined in the endorsement; and (b) all existing and proposed setback lines. If the project is completed or existing, the survey must show all existing improvements and existing setback lines.
- If you issue the ALTA 36.2-06 (Owner’s) or 36.3-06 (Loan), a lease must be insured on Schedule A. An easement should not be insured on Schedule A.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of either of these endorsements.
Energy Project – Covenants, Conditions and Restrictions – Land Under Development – Owner’s & Energy Project – Covenants, Conditions and Restrictions – Land Under Development – Loan Endorsements (36.4-06 & 36.5-06)
Purpose of Endorsement
These endorsements are part of a series of endorsements designed specifically for energy projects (e.g., wind farms, solar farms, traditional electricity generating facilities, etc.). Such projects may include fee parcels, leaseholds, and/or easements.
ALTA Endorsement 36.4-06 is designed to be issued with a 2006 ALTA Owner’s Policy. ALTA Endorsement 36.5-06 is designed to be issued with a 2006 ALTA Loan Policy.
These endorsements contain an expansive definition of “Electricity Facility” that includes an existing electricity generating facility and an electricity generating facility under construction or to be built on the land in locations according to defined “Plans” depicting the project. These endorsements also contain a definition of existing and future “Severable Improvements” linked to the definition of Electricity Facility and the Plans.
The endorsements insure against: (a) violations of covenants by any existing or future Electricity Facility or Severable Improvement, (b) enforced removal of any existing or future Electricity Facility or Severable Improvement as a result of a violation of an existing platted building setback line, and (c) notices of violations of covenants relating to environmental protection, unless an exception in Schedule B identifies the violation or notice of violation, as applicable.
Underwriting Requirements
- The project must involve an electricity generating facility (e.g., wind farms, solar farms, traditional electricity generating facilities, etc.). The electricity facility can be existing or to be built or under construction.
- These endorsements are designed primarily for a policy insuring an energy project under construction or to be built. However, they can be used for an existing, completed energy project with appropriate modification to the definitions of Electricity Facility and Severable Improvement, and deletion of the references to the Plans.
- If the project is to be built or under construction, obtain and retain a set of the plans for the project (survey, site and elevation plans or other depictions or drawings prepared by an architect or engineer), and such plans must be referenced in Section 2c. of the endorsement. If the project is completed or existing, and no construction is contemplated, you may waive the requirement of the plans, and modify the endorsement to delete the reference to the Plans.
- Obtain a current, accurate ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, which shows the location of: (a) all existing improvements and all proposed improvements, based upon the Plans defined in the endorsement; and (b) all existing and proposed setback lines. If the project is completed or existing, the survey must show all existing improvements and existing setback lines.
- Verify that the existing and planned electricity facility and severable improvements do not materially violate any existing enforceable covenants. Include specific Exceptions for each violation of any covenant in Schedule B of the policy.
- Verify that the existing and planned electricity facility and severable improvements do not violate a building setback line shown on the survey. Include specific Exceptions for each encroachment of either an existing or planned electricity facility and any severable improvement over building setback lines in the policy’s Schedule B.
- If a notice of violation of a covenant relating to environmental protection has been recorded in the real property records (the “Public Records”), except this notice of violation or any other recorded notice of enforcement relating to environmental protection in the policy’s Schedule B.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of either of these endorsements.
Energy Project – Encroachment Endorsement (36.6-06)
Purpose of Endorsement
The ALTA 36.6-06 – Energy Project – Encroachment Endorsement insures against loss or damage if there is an encroachment of an Electricity Facility or Severable Improvement onto adjoining land or into an easement, unless there is an exception for the encroachment in the policy. This endorsement also insures against loss or damage to, or enforced removal of, either an Electricity Facility or a Severable Improvement because of an exercise of the right to use or maintain any easement.
This endorsement contains an expansive definition of “Electricity Facility” that includes an existing electricity generating facility and an electricity generating facility under construction or to be built on the land in locations according to defined “Plans” depicting the project. This endorsement also contains a definition of existing and future “Severable Improvements” linked to the definition of Electricity Facility and the Plans.
Underwriting Requirements
If the project is to be built or under construction, obtain and retain a set of the plans for the project (survey, site and elevation plans or other depictions or drawings prepared by an architect or engineer), and such plans must be referenced in Section 2b. of the endorsement. If the project is completed or existing, and no construction is contemplated, you may waive the requirement of the plans, and modify the endorsement to delete the reference to the Plans.
Obtain a current ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, which shows the location of: (a) all existing improvements and all proposed improvements based upon the Plans defined in the endorsement; and (b) all existing and proposed easements. If the project is completed or existing, the survey must show all existing improvements and all existing easements.
If the survey discloses an encroachment, or an encroachment is known to exist, the Schedule B of the policy should include a numbered Exception for any encroachment, and the Exception number for the encroachment must be referenced in Section 3e. of the endorsement.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Energy Project – Fee Estate – Owner’s Policy Endorsement (36.7-06)
Purpose of Endorsement
The ALTA 36.7-06 Energy Project – Fee Estate – Owner’s Policy Endorsement is one of a series of endorsements designed specifically for energy projects (e.g., wind farms, solar farms, traditional electricity generating facilities, etc.). Such projects may include fee parcels, leaseholds, and/or easements.
This endorsement includes coverage for insured fee estates utilized to create rights in the land for some or all of the project improvements.
The ALTA 36.7-06 is designed for use with an Owner’s Policy.
This endorsement contains an expansive definition of “Electricity Facility” that includes an existing electricity generating facility and an electricity generating facility under construction or to be built on the land in locations according to defined “Plans” depicting the project. This endorsement also contains a definition of existing and future “Severable Improvements” linked to the definition of Electricity Facility and the Plans.
The endorsement provides that, in the event of an ejection, the calculation of loss shall include the diminution in value of the Insured’s interest in any existing or future Severable Improvements.
This endorsement contains a definition of “Constituent Parcel.” The endorsement provides that, in the event of an ejection caused by a covered matter affecting any Constituent Parcel, the computation of loss or damage resulting from the ejection shall include loss or damage to the integrated project.
This endorsement provides that the Insured Claimant shall have the right to have the fee estate, any Electricity Facility, and any Constituent Parcel valued either as a whole or separately.
Similar to other endorsements in this series, this endorsement has an exclusion clarifying that it excludes costs of remediation resulting from environmental damage or contamination.
Underwriting Requirements
- The project must involve an electricity generating facility (e.g., wind farms, solar farms, traditional electricity generating facilities, etc.). The electricity facility can be existing or to be built or under construction.
- This endorsement is designed primarily for a policy insuring an energy project under construction or to be built. However, it can be used for an existing, completed energy project with appropriate modification to the definitions of Electricity Facility and Severable Improvement, and deletion of the references to the Plans.
- If the project is to be built or under construction, obtain and retain a set of the plans for the project (survey, site and elevation plans or other depictions or drawings prepared by an architect or engineer), and such plans must be referenced in Section 2d. of the endorsement. If the project is completed or existing, and no construction is contemplated, you may waive the requirement of the plans, and modify the endorsement to delete the reference to the Plans.
- Obtain a current, accurate ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, which shows the location of: (a) all existing improvements and all proposed improvements, based upon the Plans defined in the endorsement; and (b) all existing and proposed setback lines. If the project is completed or existing, the survey must show all existing improvements and existing setback lines.
- A fee interest must be insured on Schedule A.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Energy Project – Fee Estate – Loan Policy Endorsement (36.8-06)
Purpose of Endorsement
The ALTA 36.8-06 Energy Project – Fee Estate – Loan Policy Endorsement is one of a series of endorsements designed specifically for energy projects (e.g., wind farms, solar farms, traditional electricity generating facilities, etc.). Such projects may include fee parcels, leaseholds, and/or easements.
This endorsement includes coverage for insured fee estates utilized to create rights in the land for some or all of the project improvements.
The ALTA 36.8-06 is designed for use with a Loan Policy.
This endorsement contains an expansive definition of “Electricity Facility” that includes an existing electricity generating facility and an electricity generating facility under construction or to be built on the land in locations according to defined “Plans” depicting the project. This endorsement also contains a definition of existing and future “Severable Improvements” linked to the definition of Electricity Facility and the Plans.
The endorsement provides that, in the event of an ejection, the calculation of loss shall include the diminution in value of the Insured’s interest in any existing or future Severable Improvements.
This endorsement contains a definition of “Constituent Parcel.” The endorsement provides that, in the event of an ejection caused by a covered matter affecting any Constituent Parcel, the computation of loss or damage resulting from the ejection shall include loss or damage to the integrated project.
This endorsement provides that the Insured Claimant shall have the right to have the fee estate, any Electricity Facility, and any Constituent Parcel valued either as a whole or separately.
Similar to other endorsements in this series, this endorsement has an exclusion clarifying that it excludes costs of remediation resulting from environmental damage or contamination.
Underwriting Requirements
- The project must involve an electricity generating facility (e.g., wind farms, solar farms, traditional electricity generating facilities, etc.). The electricity facility can be existing or to be built or under construction.
- This endorsement is designed primarily for a policy insuring an energy project under construction or to be built. However, it can be used for an existing, completed energy project with appropriate modification to the definitions of Electricity Facility and Severable Improvement, and deletion of the references to the Plans.
- If the project is to be built or under construction, obtain and retain a set of the plans for the project (survey, site and elevation plans or other depictions or drawings prepared by an architect or engineer), and such plans must be referenced in Section 2d. of the endorsement. If the project is completed or existing, and no construction is contemplated, you may waive the requirement of the plans, and modify the endorsement to delete the reference to the Plans.
- Obtain a current, accurate ALTA survey certified to CATIC, or equivalent satisfactory to CATIC, which shows the location of: (a) all existing improvements and all proposed improvements, based upon the Plans defined in the endorsement; and (b) all existing and proposed setback lines. If the project is completed or existing, the survey must show all existing improvements and existing setback lines.
- A fee interest must be insured on Schedule A.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.
Policy Authentication Endorsement (39-06)
Purpose of Endorsement
The ALTA 39-06 Policy Authentication Endorsement insures that the Company will not deny liability because either the policy or any endorsement to the policy has been issued electronically or lacks an original signature.
Underwriting Requirements
To include this endorsement, the policy must be properly issued with a designated policy number and Date of Policy.
Please contact a member of VATC’s underwriting staff if there are questions about the issuance of this endorsement.