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Extended Coverage

If the policy contains an insuring provision and the standard exceptions (such as parties in possession, unrecorded easements, survey matters, mechanic's liens, and taxes and assessments not shown as existing liens) are deleted, the insured is given extended coverage.

Requirement

EXTR01 STG

Parties in Possession

The exception for "Rights or claims of parties in possession not recorded in the Public Records" may be deleted if the Company receives, at or prior to closing, a satisfactory affidavit executed by the owner of the Land stating that no one is in possession of the Land other than the owner and the tenants of the owner. If there are tenants, their names and the form of their leases must also be indicated, as well as any options to purchase or rights of first refusal. The Company may, at its option, also require an inspection of the Land. The Company may except in the Policy to any tenancy or other matter that is disclosed by such affidavit or inspection.  

Comment: You may use this requirement to describe the Company's general requirements for deleting or modifying the quoted standard exception. In general, you may rely on an owner's affidavit, listing all tenants, in order to delete this exception. Do not insure without the Company's approval if a mortgagor remains in possession after foreclosure. Except to known matters such as tenants.

EXTR02 STG

Parties in Possession (Commercial or Agricultural)

Intentionally omitted

EXTR03 STG

Easements and Survey Matters

The exceptions for "Easements, or claims of easements, not recorded in the Public Records" and "Encroachments, overlaps, boundary line disputes, or other matters which would be disclosed by an accurate survey or inspection of the Land" or other suitable survey exception may be deleted (except "shortages in area" in Texas) upon review and examination by the Company, prior to closing, of a satisfactory survey of the Land duly certified to the Company by a registered land surveyor acceptable to the Company, and stating that it was made either in accordance with the "Minimum Standard Detail National Requirements for ALTA/ACSM Land Title Surveys as adopted by the American Land Title Association and the American Congress on Surveying & Mapping" or in accordance with the applicable state land and survey standards, or as otherwise acceptable to the Company. In lieu of or in addition to an acceptable survey, the Company may, at its option, require an inspection of the Land and/or an affidavit from the owner of the Land stating that there are no easements, encroachments, boundary line issues or recent improvements since the date of the survey. The Company may except in the Policy to any matter that is disclosed by such survey, inspection or affidavit.

Comment: You may use this requirement to describe the Company's general requirements for deleting or modifying the quoted standard exceptions. The Company may not require a survey in all circumstances in order to delete the standard survey exceptions, for example, on Loan Policies covering 1-4 family residential property in established subdivisions. Please refer to Underwriting Manual, Surveys, Section 18.40. Where required, the survey must be current or confirmed by an acceptable affidavit or inspection (unless state regulation requires a current survey). All encroachments, conflicts and evident easements and covenant violations disclosed by the survey, inspection and/or affidavit must be excepted.

EXTR04 STG

Survey Matters (Usual Survey Exception)

Intentionally omitted

EXTR06 STG

Easements or claims of easements

Intentionally omitted

EXTR07 STG

Mechanic's Liens

The exception for "Any lien, or right of a lien, for services, labor, material or equipment, heretofore or hereafter furnished, imposed by law and not recorded in the Public Records" or other suitable mechanic's liens exception may be deleted if: (A) if there has been no recent construction, the Company receives a satisfactory affidavit executed by the owner of the Land stating that no improvements have been made to the premises during the applicable lien period, or (B) if there have been only repairs (i.e., not new construction or major renovation) during the applicable lien period, the Company receives a satisfactory affidavit executed by the owner of the Land describing such repairs and stating that all such work has been paid in full. The Company may, at its option, also require proof of payment of all such work, or (C) if there has been recent construction, the Company receives satisfactory final affidavits, proof that all work and materials from which a lien may arise have been paid in full (e.g., lien waivers, copies of paid bills, etc., acceptable to the Company), and a list of all contractors, subcontractors and suppliers. In addition, the Company may, at its option, also require indemnities and financial statements, if applicable. With respect to any of the foregoing, the Company may, at its option, also require an inspection of the Land. Upon review of these items, the Company may make additional requirements and exceptions.

Comment: You may use this requirement to describe the Company's general requirements for deleting or modifying the quoted standard exception. Determine that no work on the property (which may include adjacent land and/or other units owned by the seller/borrower) has been performed within the applicable lien period or require detailed information confirming that all work has been paid in full, including lists of all contractors, subcontractors and suppliers, together with lien waivers and/or paid bills. If doubt exists as to whether work was performed and/or completed, require an inspection. If the project involves a construction loan (i.e., pending or proposed improvements), contact an underwriter regarding additional requirements, exceptions and procedures. In some states, recording of the construction mortgage is sufficient to establish priority. In some states, you must require an inspection to verify that no work was begun prior to recording. In some states, the Company requires compliance with specific procedures, such as a specific pending disbursement clause in the policy, indemnity(ies) for possible mechanic's liens, and proof that all work performed to date has been paid in full.

 

EXTR08 STG

Taxes and Assessments

The exception for "Taxes or assessments which are not recorded as existing liens in the Public Records" or other suitable taxes and assessment exception may be deleted or modified if, at or prior to closing, the Company can ascertain that all taxes and assessments are paid, that there are no pending proceedings to create or confirm a special assessment on the Land, and that there is no work that may result in an assessment lien. The Company may, at its option, also require a satisfactory affidavit executed by the owner of the Land stating that all taxes and assessments have been paid, together with proof of payment thereof. The Company may except in the Policy to any matter disclosed by such inquiry.

Comment: You may use this requirement to describe the Company's general requirements for deleting or modifying the quoted standard exception. Upon determination of the status of the taxes and assessments, consider replacing the standard general tax exception with a more specific tax exception tailored to the current status, where permitted, for example: "Taxes for the year [insert specific tax year, typically the current tax year, as applicable] and subsequent years, a lien, not yet due and payable."

 

 

Exception

EXTX01 ALTA

Parties in Possession

Rights or claims of parties in possession not recorded in the Public Records.

Comment: Use this exception unless you determine the names of those persons in possession, including tenants, if any, and you except to their rights. If a mortgagor remains in possession after foreclosure, consult with the Company.

Note: The above exception was modified to incorporate the definition of Public Records in the 2006 Policy.


See Exceptions:
STAX01 ALTA Parties in Possession

See Underwriting Manuals: 11.08 Leases; 15.04 Parties In Possession; 5.32 Extended Coverage

EXTX02 ALTA

Easements

Easements or claims of easements not recorded in the Public Records.

Comment: Use this exception unless you determine that there are no applicable unrecorded easements.

Note: The above exception was modified to incorporate the definition of Public Records in the 2006 Policy.

See Exceptions: STAX02 ALTA Easements.

See Underwriting Manuals: 18.40 Surveys; 5.00 Easements And Easement Insurance; 5.32 Extended Coverage

EXTX03 ALTA

Survey Exception - Owner's Policy

Rights or claims of parties in possession and easements or claims of easements not recorded in the Public Records, boundary line disputes, overlaps, encroachments, and any matters not of record which would be disclosed by an accurate survey and inspection of the Land.

Comment: Use this exception or a preferred alternative unless you are furnished with an acceptable survey and and/or affidavit or unless you issue the Short Form Policy, Master Loan Policy, or other Loan Policy (pursuant to Company guidelines). If you are aware of specific survey issues, they should be noted as exceptions.

Note: The above exception was modified to incorporate the definitions of Land and Public Records in the 2006 Policy.

See Exceptions: EXTX08 STGC Preferred Survey Exception; EXTX04 ALTA Survey Exception - Mortgagee Policy, EXTX07 STGC Survey Exception (Usual Survey Exception) and STAX03 ALTA Survey Exception


See Underwriting Manuals: 18.40 Surveys; 5.32 Extended Coverage

EXTX04 ALTA

Survey Exception - Mortgagee Policy

Any state of facts as would be disclosed by an accurate survey and inspection of the Land.

Comment: Use this exception or a preferred alternative unless you are furnished with an acceptable survey and/or affidavit or unless you issue the Short Form Policy, Master Loan Policy, or other Loan Policy (pursuant to Company guidelines). If you are aware of specific survey issues, they should be noted as exceptions.

Note: The above exception was modified to incorporate the definition of Land in the 2006 Policy.

See Exceptions: EXTX08 STGC Preferred Survey Exception, EXTX03 ALTA Survey Exception - Owner's Policy, EXTX07 STGC Survey Exception (Usual Survey Exception) and STAX03 ALTA Survey Exception

See Underwriting Manuals: 18.40 Surveys; 5.32 Extended Coverage

EXTX05 ALTA

Mechanic's Liens

Any lien, or right to a lien, for services, labor, or material heretofore or hereafter furnished, imposed by law and not shown by the Public Records.

Comment: Use this exception or a preferred alternative unless you can determine that: (a) no recent work has occurred, and (b) the lien to be insured does not secure a construction loan, unless the Company's requirements are met.

Note: The above exception was modified to incorporate the definition of Public Records in the 2006 Policy.

See Exceptions: EXTX09 STGC Preferred Mechanic's Liens Exception, STAX04 ALTA Statutory Lien for Services, Labor or Materials

See Underwriting Manuals: 12.12 Mechanic's Liens; 3.44 Construction Loan Policies; 5.32 Extended Coverage

EXTX06 ALTA

Taxes and Assessments

Taxes or special assessments which are not shown as existing liens by the Public Records.

Comment: Use this exception or a preferred alternative unless you can determine that there are no unpaid taxes or assessments, unless the Company's requirements are met. In addition to confirming that there are no open taxes or assessments, you must determine there is no work or proceeding that would result in assessments and no possible rollback or supplemental taxes.

Note: The above exception was modified to incorporate the definition of Public Records in the 2006 Policy.

See Exceptions: EXTX10 STGC Preferred Taxes and Assessments Exception; STAX05 ALTA Liens for Taxes, Assessments and Other Charges

See Underwriting Manuals: 19.04 Taxes And Assessments 5.32 Extended Coverage

EXTX07 STG

Survey Exception (Usual Survey Exception)

Encroachments, overlaps, boundary line disputes, or other matters which would be disclosed by an accurate survey or inspection of the Land.

Comment: Use this exception or a preferred alternative unless you are furnished with an acceptable survey and/or affidavit or unless you issue the Short Form Policy, Master Loan Policy, or other Loan Policy (pursuant to Company guidelines). If you are aware of specific survey issues, they should be noted as exceptions.

See Exceptions: EXTX08 STGC Preferred Survey Exception, EXTX03 ALTA Survey Exception - Owner's Policy, EXTX04 ALTA Survey Exception - Mortgagee Policy, EXTX07 STGC Survey Exception (Usual Survey Exception) and STAX03 ALTA Survey Exception

See Underwriting Manual: 18.40 Surveys, 5.32 Extended Coverage, 11.28.1 In General, 14.12.8 Schedule B Of The Owner's Policy

EXTX08 STG

Preferred Survey Exception

Any discrepancies, conflicts or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of the improvements.

Comment: This is the preferred survey exception. Use this exception or a suitable alternative unless you are furnished with an acceptable survey and/or affidavit or unless you issue the Short Form Policy, Master Loan Policy, or other Loan Policy (pursuant to Company guidelines). If you are aware of specific survey issues, they should be noted as exceptions.

See Exceptions: EXTX03 ALTA Survey Exception - Owner's Policy, EXTX04 ALTA Survey Exception - Mortgagee Policy, EXTX07 STGC Survey Exception (Usual Survey Exception) and STAX03 ALTA Survey Exception

EXTX09 STG

Preferred Mechanic's Liens Exception

Any lien, or right to a lien, for services, labor, material or equipment, heretofore or hereafter furnished, imposed by law and not recorded in the Public Records.

Comment: This is the preferred mechanic's liens exception. Use this exception unless you can determine that: (a) no recent work has occurred, and (b) the lien to be insured does not secure a construction loan, unless the Company's requirements are met.

See Exceptions: EXTX05 ALTA Mechanic's Liens, STAX04 ALTA Statutory Lien for Services, Labor or Materials

See Underwriting Manuals: 12.12 Mechanic's Liens; 3.44 Construction Loan Policies; 5.32 Extended Coverage

EXTX10 STG

Preferred Taxes and Assessments Exception

Taxes or assessments which are not recorded as existing liens in the Public Records.

Comment: This is the preferred taxes and assessments exception. Use this exception unless you can determine that there are no unpaid taxes or assessments, unless the Company's requirements are met. In addition to confirming that there are no open taxes or assessments, you must determine there is no work or proceeding that would result in assessments and no possible rollback or supplemental taxes.

See Exceptions: EXTX06 ALTA Taxes and Assessments, STAX05 ALTA Liens for Taxes, Assessments and Other Charges

See Underwriting Manuals: 19.04 Taxes And Assessments 5.32 Extended Coverage