This form should not be used if a comparable ALTA version is available. If a comparable ALTA version is available, the most current version of the ALTA form available in each state should be used, unless approved by a Stewart underwriter.
RECHARACTERIZATION OF SYNTHETIC LEASE ENDORSEMENT
STEWART TITLE GUARANTY COMPANY
1. The following exception is added to Schedule B:
|Any assertion or determination that (a) the lease referred to as item 1 above is not a "true lease" or; (b) the vesting of title in _________________________ respectively, is part of a loan transaction, including the assertion that the deed and lease to constitute a mortgage or other security device.
2. The following exception is added to Schedule B:
|(Schedule B-1 of the Loan Policy) In addition to the exceptions from coverage otherwise contained in this Schedule B-1, the coverage under this policy is subject to defects, liens or encumbrances arising after the date ________________ but prior to (i) a final, non appealable order of a court of competent justification recharacterizing the lease dated ________ made by ___________________ as Lessor, and ____________________ as Lessee, as a mortgage, and (ii) the recording of a memorandum of said lease with notice of said recharacterization.
|(Schedule B of Owner's policy to SPE) Upon a determination that the interest of the insured should be recharacterized as a mortgage, this policy shall be deemed null and void and the insured shall be deemed to be the insured under Loan Policy No. ____________.
3. Owner's Policies No. _______________ and Loan Policy(ies) No. _____________ have been issued concurrently to insure alternative __________ in the land described in Schedule A of each policy. These policies do not insure against loss or damage (and the Company will not pay costs, attorney's fees or expenses) which arise by reason of any assertion that the title to the land is insured by one of the alternative policies, but not either of the others.
4. If the Company pays for loss or damage to the insured, and any costs, attorney’s fees or expenses which it becomes obligated to pay under any of the above policies, it shall have fully performed its obligations with respect to that matter and shall not be liable under the other policies for any loss or damage caused thereby.
5. If the title is determined to be vested as stated under any of the above policies, and the company:
|a) removes any alleged defect, lien or encumbrance;|
|b) cures any lack of a right of access to or from the land;|
|c) cures any claim of unmarketability to title which does not arise by reason of any provision in the documents of the transaction creating the interest of the insured, and|
|d) established the lien of the insured mortgage (if the claim is made under the Loan Policy)
|all as insured by that policy, in a reasonably diligent manner, including litigation and the completion of any appeals therefrom, it shall have fully performed its obligations with respect to that matter and shall not be liable under either of the other policies for any loss or damage caused thereby.
6. Neither policy insures against loss or damage (and the Company will not pay costs, attorney's fees or expenses) which arise by reason of a claim that the title to the land is unmarketable by reason of any provision in the documents of the transaction creating the interest of the insured.
7. The total liability of the Company under the politics identified in this exception shall not exceed _____________________ but its liability in this policy for the land described in Schedule A remains governed by the provisions of Paragraph 7 of the Conditions and Stipulations of this Policy.
8. Payments made on account of loss or damage insured against under any of these policies shall be made to __________________ (the "Agent"), as insured under Policy No. ______________ until such time as (A)(i) the mortgage to the Agent Insured under Policy ___________ is satisfied, (ii) the lease dated as of _______________, made by _____________________, as Lessor and ____________________, as Lessee has been terminated and (iii) the mortgage contained in the lease in item (ii) above has been satisfied, or (B) the mortgages and the lease in items (A)(i), (ii) and (iii) are all assigned to other holders of the interests therein.
9. Any payment by the Company on any of the policies listed herein shall reduce pro tanto the liability of the Company under each of these policies, and the amount so paid shall be deemed a payment under all of them.
The total liability of the Company under said policy or under this and any prior endorsements thereto shall not exceed, in the aggregate, the amount of liability stated on the face of said policy, as the same may be specifically amended in dollar amount by this or any prior endorsements, and the costs which the Company is obligated to pay under the Conditions and Stipulations of the policy. This endorsement is made a part of said policy or certificate and is subject to the terms thereof, except as modified by the provisions hereof. Nothing herein contained shall be construed as extending or changing the effective date of the aforesaid policy or certificate unless otherwise expressly stated.
No guidelines are available for this form at this time.