COS

Contracts for Sale

In some states, the Company may insure a contract purchaser if the Company’s requirements are met.
New York has a special endorsement for insuring the purchaser in contract, called the TIRSA Contract Vendee Endorsement (1/31/95).
Where the contract calls for a price pre acres, raise ACRX01.

Requirement

COSR01 STG

Proof of Forfeiture

Terms and provisions of Contract for Sale between ____________, Seller, and ____________ Buyer [recorded ____________]. The Company requires for review a judicial declaration of forfeiture or a release in recordable form of the Contract for Sale by the Buyer. At the time the Company is furnished this item, the Company may make additional requirements or exceptions.
Comment: If you are informed or suspect that a known contract has been forfeited, use this requirement. In some jurisdictions, an affidavit may be an acceptable alternative.

See Underwriting Manual

COSR03 STG

Insuring the Contract – Review a Copy

The Company requires for review a copy of the contract for sale covering the land. At that time, the Company may make additional requirements or exceptions.
Comment: In order to insure a contract for sale, several conditions must be met.

See Underwriting Manual

COSR04 STG

Possible Outstanding Contracts

The Company requires satisfactory evidence as to whether there are any outstanding contracts for sale on the land. At that time, the Company may make additional requirements or exceptions.
Comment: You may use this requirement if you suspect there are outstanding contracts for sale: condominium units in a construction loan or project sale; developer lots in an unimproved subdivision; other known circumstances of common contract financing.

COSR05 STG

Requirement of Seller Consent to Transaction

Terms and provisions of contract for sale between ____________, seller, and ____________ buyer [recorded ____________]. The Company requires the Seller to consent to any transaction by the Buyer and to verify the contract is current and not in default.
Comment: Use this requirement if an insured contract will be mortgaged or assigned. In some circumstances, the Company will insure a mortgage of a contract interest.

See Underwriting Manual

COSR06 STG

New York City RPT, Contract over $400,000.00

Note: Where the consideration for the transaction is $400,000.00 or more, a copy of the contract of sale or the closing statement must be appended to the New York City Real Property Transfer Tax (RPT) form.

Exception

COSX01 STG

Contract Exception – Contract Not Insured

Terms and provisions of the contract for sale between ____________, seller, and ____________, buyer, [recorded ____________]. The Company does not represent the current ownership of this interest.
Comment: Use this exception to an outstanding contract if the Company is not insuring a purchaser.

COSX02 STG

Contract Exception – Contract Insured

Terms and provisions of the contract for sale between ___________, seller, and _____________, buyer, recorded _____________.
Comment: Use this Schedule B exception when insuring the equitable interest of the buyer to purchase the title to the land under the contract. The contract or a satisfactory memorandum must be signed and acknowledged by the seller in accordance with state law and must be recorded.

See Underwriting Manual

COSX03 STG

Seller’s Interest Assigned

The interest of the seller to receive payment under the contract was assigned to ___________ by assignment recorded ____________.
Comment: Add this exception if an insured or excepted contract has been assigned by the seller (in a sale or mortgage of the seller’s interest).

See Underwriting Manual

COSX04 STG

Buyer’s Interest Assigned

The interest of the buyer under the contract was assigned to ____________, by assignment recorded ____________.
Comment: Add this exception if an insured or excepted contract has been assigned by the buyer.

See Underwriting Manual

COSX05 STG

Possible Outstanding Contracts

Any and all unrecorded contracts for the sale and purchase of the land, or any part of said land, and the rights and interest of any and all parties under such contracts.
Comment: Use this exception if you suspect there are outstanding contracts: e.g., condominium units in a construction loan or project sale; developer lots in an unimproved subdivision; or other known circumstances of common contract financing.

COSX06 STG

Recharacterization as a Financing Scheme

Any claim that the vesting of title in the insured is part of a loan transaction, or that the deed to the insured and/or the contract for sale referred to in Schedule B constitutes a mortgage or other security device.
Comment: A contract may be part of a financing scheme, particularly if the buyer previously conveyed title to the new seller. In such event, use this exception when insuring the fee owner.

COSX07 STG

Contract vendee exceptions

Policy excepts the terms, conditions and provisions of the contract of sale, and the effect of any failure to comply with same.
The contract of sale or a memorandum thereof must be recorded, or policy will except any loss, cost or damage arising from such failure to record.
If the contract vendee enters into possession, or has a right to enter into possession during the contract term, the contract may be subject to mortgage recording tax pursuant to Tax Law § 250 ff.
Notwithstanding the terms, provisions and conditions of the printed portion of the policy, or any endorsement attached thereto, policy excepts any mechanic’s lien which may be filed on or after the policy date.

COSX08 STG

Where Improvements are contemplated - Owner’s P

Liability hereunder at the date hereof limited to $____________. Liability shall increase as contemplated improvements are made so that liability hereunder shall be limited to said sum plus the amount actually expended by the insured in improvements in good faith and without knowledge of any defects in or objections to the title at the time the expenditure occurs. In no event shall the liability of the Company hereunder exceed the face amount of this Policy. Nothing contained in this paragraph shall limit any exception or any printed provision of this Policy.

COSX09 STG

Where Improvements are contemplated - Owner’s P

Liability hereunder at the date hereof limited to $____________. Liability shall increase as contemplated improvements are made so that liability hereunder shall be limited to said sum plus the amount actually expended by the insured in improvements in good faith and without knowledge of any defects in or objections to the title at the time the expenditure occurs. Title shall be continued down to the date of each payment or other period, and the Company shall furnish to the vendee upon the request of the vendee, a continuation search report, which shall show if any liens or encumbrances have been recorded or filed, and whether any taxes or assessments have been paid. In no event shall the liability of the Company hereunder exceed the face amount of this Policy. Nothing contained in this paragraph shall limit any exception or any printed provision of this Policy. Any continuation search report shall be at an additional charge.
Note: You may add additional local exceptions here. Please consult with our underwriting personnel in preparing appropriate provisions.

Schedule A

COSS01 STG

Description of Insured Contract

The equitable interest to purchase title to the land created by that land contract dated ____________ between _________, seller, and _____________, buyer, recorded ___________________.
Comment: Use this description of the contract if the Company insures the buyer’s interest.

See Underwriting Manual

COSS02 STG

Certification for Contract Vendee

The interest insured by this policy:
______________, as vendee under a valid and enforceable contract of sale dated __/__/__, made by ___________, as vendor, and recorded on __/__/__, in __________, [or a memorandum of which was recorded on __/__/__ in ______,] (and thereafter assigned to ________ by assignment and recorded on __/__/__, in __________,); and subject to the liens, encumbrances and other matters, if any, set forth in this certificate.
Note: You may add additional local Schedule A provisions here. Please consult with our underwriting personnel in preparing appropriate provisions.