CON

Condominiums

To insure on a condominium, you must verify that the Declaration complies with state law. The Company requires a review of the Declaration to verify that the Condominium Endorsement ALTA Form 4 (or 4.1 in those states where the assessment lien has priority for some assessments) can be issued. You must carefully consider expandable condominium regimes in accordance with the Company’s guidelines. Always be aware of mechanic’s lien issues on new condominium projects recently or not yet complete.

Requirement

CONR01 STG

Condominium Assessments

The Company requires a satisfactory statement from the Association or its agent stating the amount of the unpaid common or maintenance charges against the unit, to the date of closing. At that time, the Company may make additional requirements or exceptions.
Comment: When insuring on a condominium, you must confirm that all assessments and charges are paid current.

CONR02 STG

Approval of Sale

The Condominium Declaration or By-Laws contains a provision requiring prior approval of the sale by the Association or creating a right of first refusal. The Company requires satisfactory proof that the provisions have been complied with. At that time, the Company may make additional requirements or exceptions.
Comment: If the Declaration creates a right of first refusal or option to purchase, or requires the association’s approval of a transaction, verify that approval of the transaction occurred.

CONR03 STG

Certificate of Completion

The Company requires the recordation of a certificate of completion in accordance with applicable law.
Comment: The Uniform Condominium Act, adopted in numerous states, requires recordation of a certificate of completion before units may be sold. You also must verify that no mechanic’s lien issues exist.

See Underwriting Manual

Exception

CONS01 STG

Unit Description (Fractional or Percentage Inte

Unit No. ______, Building ______ of ____________ condominium regime, as created by the Declaration recorded ____________, together with an undivided ___________ interest in the appurtenant common elements.
Comment: This description refers to the fractional or percentage interest. The Company prefers not to do that if the interest may change in an expandable condominium.

CONS02 STG

Unit Description (No Fractional or Percentage I

Unit No. ______, Building ______ of ____________ condominium regime, as created by Declaration recorded ____________, together with an undivided interest in the appurtenant common elements.
Comment: This description does not refer to the specific fractional or percentage interest in the common elements. The Company prefers this exception, particularly if the interest may change in an expandable condominium.

CONX01 ALTA

Declaration Exception (with Option or First Ref

Terms, provisions, option, right of first refusal, covenants, conditions, restrictions, easements, charges, assessments, and liens provided by applicable condominium law or the Condominium Declaration and Bylaws recorded ___________, but omitting any covenant, condition or restriction, if any, based on race, color, religion, sex, handicap, familial status, or national origin unless and only to the extent that the covenant, condition or restriction (a) is exempt under Title 42 of the United States Code, or (b) relates to handicap, but does not discriminate against handicapped persons.
Comment: Except to the terms of the Declaration. This exception also expressly refers to a possible option or right of first refusal.

See Underwriting Manual

CONX02 ALTA

Declaration Exception (with Option or First Ref

Terms, provisions, option, right of first refusal, covenants, conditions, restrictions, easements, charges, assessments, and liens provided by applicable condominium law or the Condominium Declaration and Bylaws recorded ______________, but omitting any covenant, condition or restriction, if any, based on race, color, condition or restriction (a) is exempt under Title 42 of the United Sates Code, or (b) relates to handicap, but does not discriminate against handicapped persons. The Condominium Declaration and Bylaws also provide faith and for value.
Comment: This language may be used if the Declaration and state law provide that violations will not defeat good faith mortgages. The Condominium Endorsements (ALTA 4 and 4.1) also provide this coverage.

See Underwriting Manual

CONX03 ALTA

Declaration Exception (with Option or First Ref

Terms, provisions, option right of first refusal, covenants, conditions, restrictions, easements, charges, assessments, and liens provided by applicable condominium law or the Condominium Declaration and Bylaws recorded _____________, but omitting any covenant, condition or restriction, if any, based on race, color. Religion, sex, handicap, familial status, or national. Origin unless and only to the extent that the convenant, condition or restriction (a) is exempt under Title 42 of the United States Code, or (b) relates to handicap, but does not discriminate against handicapped persons. The Condominium Declaration and Bylaws also provide that any violation thereof shall not defeat or render invalid the lien of the insured mortgage.
Comment: This exception is appropriate only for the Loan Policy and only if the Declaration and state law provide that violations will not defeat the insured mortgage.
See

See Underwriting Manual

CONX04 ALTA

Declaration Exception (No Option or First Refus

Terms, provisions, covenants, conditions, restrictions, easements, charges, assessments, and liens provided by applicable condominium law or the Condominium Declaration and Bylaws recorded __________________, but omitting any covenant, condition or restriction, if any, based on race, color, religion, sex, handicap, familial status, or national origin unless and only to the extent that the covenant, condition or restriction (a) is exempt under Title 42 the United States Code, or (b) relates to handicap, but does not discriminate against handicapped persons.
Comment: Except to the terms of the Declaration.

See Underwriting Manual

CONX05 ALTA

Declaration Exception (No Option or First Refus

Terms, provisions, covenants, conditions, restrictions, easements, charges, assessments, and liens provided by applicable condominium law or the Condominium Declaration and Bylaws recorded _____________, but omitting any covenant, condition or restriction, if any, based on race, color, religion, sex, handicap, familial status, or national origin unless and only to the extent that the covenant, condition or restriction (a) is exempt under Title 42 of the United States Code, or (b) relates to handicap, but does not discriminate against handicapped persons. The Condominium Declaration and Bylaws also provide that any violation thereof shall not defeat or render invalid the lien of a mortgage or deed of trust made in good faith and for value.
Comment: This language may be added to the Declaration exception if the Declaration and state law provide that violations will not defeat good faith mortgages. The Condominium Endorsements (ALTA 4 and 4.1) also provide this coverage.

See Underwriting Manual

CONX06 ALTA

Declaration Exception (No Option of First Refus

Terms, provisions, covenants, conditions, restrictions, easements, charges, assessments, and liens provided by applicable condominium law or the Condominium Declaration and Bylaws recorded ______________, but omitting any covenant, condition or restriction, if any, based on race, color, religion, sex, handicap, familial status, or national origin unless and only to the extent that the covenant, condition or restriction (a) is exempt under Title 42 the United States Code, or (b) relates to handicap, but does not discriminate against handicapped persons. The Condominium Declaration and Bylaws also provide that any violation thereof shall not defeat or render invalid the lien of the insured mortgage.
Comment: This exception is appropriate only for the Loan Policy and only if the Declaration and state law provide that violations will not defeat the insured mortgage.
See

See Underwriting Manual

CONX07 ALTA

Violation of Separate Declaration Exception Doe

The Condominium Declaration and Bylaws recorded _____________ also provide that any violation thereof shall not defeat or render invalid the lien of a mortgage or deed of trust made in good faith and for value..
Comment: This language may be used if the Declaration and state law provide that violations will not defeat good faith mortgages. The Condominium Endorsements (ALTA 4 and 4.1) also provide this coverage.

See Underwriting Manual

CONX08 ALTA

Violation of Separate Declaration Exception Doe

The Condominium Declaration and Bylaws recorded ____________ also provide that any violation thereof shall not defeat or render invalid the lien of the insured mortgage.
Comment: This exception is appropriate only for the Loan Policy and only if the Declaration and state law provide that violations will not defeat the insured mortgage.

See Underwriting Manual

CONX09 STG

Declaration Exception

Terms, provisions, covenants, conditions, restrictions, easements, charges, assessments, and liens (provisions, if any, based on race, color, religion, or national origin are omitted) provided by applicable condominium law or the Condominium Declaration and bylaws recorded ___________.
Comment: Except to the terms of the Declaration.

See Underwriting Manual

CONX10 STG

Violation Does Not Affect Good Faith Mortgage

Said instrument also provides that any violation thereof shall not defeat or render invalid the lien of a mortgage or deed of trust made in good faith and for value.
Comment: This language may be added to the Declaration exception if the Declaration and state law provide that violations will not defeat good faith mortgages. The Condominium Endorsements (ALTA 4 and 4.1) also provide this coverage.

See Underwriting Manual

CONX11 STG

Possible Unrecorded Contract Purchasers of Unit

Rights of purchasers under unrecorded contracts to purchase part of the land as condominium units and all persons claiming by, through, or under them.
Comment: On new or contemplated condominiums, outstanding contracts to buy units may exist. This issue is of particular concern on construction financing or sales of a large number of units.

CONX12 STG

Violation Does Not Affect Insured Mortgage

Said instrument also provides that any violation thereof shall not defeat or render invalid the lien of the insured mortgage.
Comment: This provision is appropriate only for the Loan Policy and only if the Declaration and state law provide that violations will not defeat the insured mortgage.

See Underwriting Manual

CONX13 STG

Assessment Lien is Subordinate to Good Faith Mo

Said instrument also provides for a lien to secure assessments, which is subordinate to the lien of certain mortgages or deeds of trust made in good faith and for value.
Comment: This provision is appropriate only for the Loan Policy and only if state law and the Declaration subordinate the assessment lien to the certain mortgages. Some state laws provide that assessments (usually six months) are superior to first mortgages. Many states provide that future assessments are superior to subordinate mortgages. In many states, you also must verify the assessments are paid current.

See Underwriting Manual

CONX14 STG

Assessment Lien is Subordinate to Insured Mortg

Said instrument also provides for a lien to secure assessments, which is subordinate to the lien of the insured mortgage.
Comment: This provision is appropriate only for the Loan Policy and only if state law and the Declaration subordinate the assessment lien to the insured mortgage. Many state laws provide that assessments (usually six months) are superior to first mortgages. Do not use this language in those states. Many states provide that future assessments are superior to subordinate mortgages; do not use this language for subordinate mortgages unless you secure the Company’s approval. In many states, you also must verify that the assessments are paid current.

See Underwriting Manual

CONX15 STG

Special Time-share Exception

This Policy does not insure against any loss by reason of the holds over or unauthorized occupancy by other owners of an interest in the unit(s) and week(s) described in Schedule A, or by the Association, the developer, its lessees or other third parties. It is understood that the land insured hereby is an undivided interest and there is excepted from this property any rights, title or interest of the other tenants in common or those persons claiming by, through, or under them, including rights of ownership, possession, reimbursement and partition, and right of the United States to sell the land.
Comment: When insuring time-shares, you must make use of this exceptions and those exceptions and requirements appropriate to condominiums.

See Underwriting Manual

CONX16 STG

Endorsement Exception if Assessment Lien has Pr

Any loss or damage caused pursuant to state law by a lien for assessments or for unpaid assessments, notwithstanding any insurance to the contrary in any attached ALTA Form 4 Condominium Endorsement or Form 9 Endorsement (Restrictions, Encroachments, Minerals).
Comment: If the Company issues the ALTA Form 4 or ALTA Form 9 Endorsement, it insures that the assessment lien is subordinate to the lien of the insured mortgage unless it adds this exception in Schedule B or in the endorsement, or unless it deletes applicable insuring provision (e.g., paragraph 4 of ALTA 4). In the alternative, the Company may simply issue the ALTA Form 4.1 Endorsement (condominium) that insures that the assessments are paid current.