NM Planned Unit Development Endorsement Guideline 13

Explanation:

This endorsement is issued in conjunction with loan policies only. It is designed for policies on individual residences in planned unit developments. A Planned Unit Development typically consists of a fee simple interest in a townhouse, patio home or single-family residence together with (1) an appurtenant easement over common elements or (2) an undivided interest as co-tenant in common elements. It provides affirmative coverage against loss caused by (1) the violation of restrictions or the existence of certain kinds of restrictions; (2) lack of priority of the mortgage lien over the lien for homeowner's association assessments; (3) enforced removal of buildings for in certain encroachment situations; and (4) failure of title because of rights of first refusal. No specific section of the policy is amended by this endorsement.

Rate: See Regulation 13 NMAC 14.10.15.

Underwriting Requirements:

(1) The examination reflects that the present development does not violate outstanding restrictive covenants. For example, the restrictions prohibit more than one residence on a platted lot and a development violates such restrictions by multiunit development.

(2) The restrictive covenants do not contain forfeiture or reversionary provisions (unless expressly subordinate to the insured mortgage).

(3) Any maintenance assessment secured by a lien in the restrictions and due prior to the Date of Policy must be paid.

(4) If the development documents provide for a maintenance assessment lien, then the documents must also provide that the assessment lien is subordinate to the lien of the insured mortgage

(5) Do not issue this endorsement if you know of any significant encroachments or boundary conflicts. This coverage should be based on an accurate survey or inspection.

(7) If any development documents affecting the title provide for a right of first refusal, verify in writing with the proper person or party that the right may not be exercised in connection with the current or prior transactions. Require a waiver or relinquishment.

The underwriting guidelines contained herein have been provided for general reference. The facts, circumstances, and location of the subject property should be considered when determining the issuance of the requested form or endorsement. Please note that all of the forms and endorsements included in this system may not be available in all states. Accordingly, please contact the appropriate Stewart Title Guaranty Company underwriting personnel in order to determine availability.

Compliance with the underwriting guidelines contained herein in no way obligates Stewart Title Guaranty Company to issue any form or endorsement.