STG High Liability (Over $40 Million) Mechanic’s Lien Coverage Approval Request [Revised 07-25-17]

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STG High Liability (Over $40 Million) Mechanic’s Lien Coverage Approval Request [Revised 07-25-17]

Form Document
02/09/2021
V 1

An underwriter must confirm that the questions are completed.

Please forward your request for senior underwriter committee approval to: Jim Gosdin, John Killea, and Lynne Demarest

Name of Issuing Office:  _____________________________________________________________

File No.:  ____________________________________________________________________________

Location of Property: ________________________________________________________________ 
Please include street address, if available.  Please include city, county, state and ZIP code.

Project Name/Designation, if any: ______________________________________________________ 

Contact Person: ______________________________________________________________________ 

Phone Number for Contact Person: _____________________________________________________ 

E-mail address for Contact Person: _____________________________________________________ 

PLEASE ALSO INCLUDE a signed STG Request for Approval to Issue Overlimits (Large) Policy or Extra Hazardous Coverage. This Mechanic’s Lien Request is not a substitute for the Overlimits Request.

1. PREMIUM. Please specify:

(a) Total premium charge to customer for title insurance policies (excluding endorsements).

$_________________

(b) Amount of premium for title insurance policies (excluding endorsements) that will be remitted to Stewart Title Guaranty Company.

$_________________

(c) Total premium charge to customer for endorsements.

$_________________

(d) Amount of premium for endorsements that will be remitted to Stewart Title Guaranty Company.

$_________________

(e) Total amount of premium for title insurance policies and endorsements that will be remitted to Stewart Title Guaranty Company.

$_________________

(f ) $ per thousand premium charge to customer for title insurance policies and endorsements.

$ _____________ / per thousand

(g) $ per thousand remitted to Stewart Title Guaranty Company for title insurance policies and endorsements.

$ _____________/ per thousand

2. PROJECT DESCRIPTION AND COMMENCEMENT OF CONSTRUCTION. Please include/describe/attach:

(a) Proposed improvements.  Insert description: ______________________________________________________________________________

(b) Has the project commenced?   _Yes   _No   If yes, what date and describe. Who was consulted, by whom, and on what date, to determine the above information?

Explain: ___________________________________________________________________________

(c) Anticipated date of commencement.  Insert date ___________________________________ 

(d) Anticipated date of completion.         Insert date ___________________________________ 

(e) Absence of Commencement: If no services, labor, materials or equipment have been provided prior to mortgage recording, will the absence of such commencement be documented by: (i) affidavits from Owner and Contractor, (ii) inspection on date of recording prior to closing, and (iii) re-inspection with date and time stamped photos immediately after recording? Describe procedure and person who will confirm/provide the above.

Insert information and name: _______________________________________________________

(f) “Early start”: If services, labor, materials or equipment have been provided prior to mortgage recording, will the following be obtained at closing: (i) lien waivers for all work performed to date, (ii) subordinations, (iii) Owner’s and Contractor’s sworn statements of work, and (iv) evidence of all bills paid current to date of closing? Describe procedure and person who will confirm/provide the above.

Insert information and name: _______________________________________________________

(g) Is a copy of an appraisal attached?    ___Yes   ___No   

3. TITLE POLICIES. Please include/describe/attach:

(a) Amount of policy(ies)  requested.

Loan Policy Amount     $_________________________________

Owner Policy Amount  $__________________________________

(b) Attach copy of commitment  (required) and pro forma policy (if available).

(c) Attach or identify proposed form of ALTA 32 series endorsement or STG Pending Disbursement Clause or other requested form to be used in the Loan Policy. If there are requested changes, please identify and attach a redline.

Insert information

(d) Attach or identify proposed  form of ALTA 33 Disbursement Endorsement or STG Construction Loan Endorsement or other requested form to be used in the Loan Policy. If there are requested changes, please identify and attach a redline.

Insert information

__________________________________________________________________________

(e) Will the Owner’s Policy include a standard general mechanic’s lien exception?   ___Yes   ___No  
If this section is blank, it will be assumed that the response is “Yes”. If the response is “No”, please explain in detail.

Include suggested exception text

_______________________________________________________________________________

4. CONTRACTOR AND SUBCONTRACTORS.  Please include/describe/attach as noted:

(a) Attach project budget or summary of budget.

(b) Name(s) of original contractor(s), contract amount, and description of work. Attach copy of contract(s). 

Name of Original Contractor(s)    Contract Amount        Describe Work/Attach copy of Contract

____________________________          ________________         _________________________

____________________________          ________________         _________________________

____________________________          ________________         __________________________

(c) Amount and percentage of each original contract that will be subject to contractual retention requirements.

Name of Original Contractor(s)         $ Amount of Retention      % Amount of Retention

________________________________         ___________________          ___________________

________________________________         ___________________          ___________________

________________________________         ___________________          ___________________


(d) Amount paid to date to original contractor(s) and amount remaining to be paid for work already performed, if any.

Name of Original Contractor(s)      Amount Paid To Date      Amount Owed for Work Performed

_____________________________          ___________________          ____________________

_____________________________          ___________________          ____________________

 

(e) Is any contractor related to the Owner?   ___Yes   ___No       If “Yes”, please describe.

_____________________________________________________________________

(f) Date of expected completion by original contractor.  Insert date  _____________

(g) List of all major first tier subcontractors, if any.

Insert description or attach list with amount(s) of contracts(s).

___________________________________________________________________________

5. INDEMNITY(IES). Please include/describe/attach:

(a) Names and roles (e.g., general contractor, owner, individual(s), etc.) of parties who will execute indemnity(ies).

Name:                                                  Role (e.g., Owner,          Financial Statement
                                                             Contractor, Parent,          Attached?
                                                             Individual(s), etc.):
_________________________________     ___________________     __Yes Date:_____   __No

_________________________________     ___________________     __Yes Date:_____   __No

_________________________________     ___________________     __Yes Date:_____   __No

_________________________________     ___________________     __Yes Date:_____   __No

(b) Will STG Indemnity – Construction be executed on the date of recording? Attach a copy.  ___Yes   ___No     

(c) What requested modifications were made to STG Indemnity – Construction form, if any? Attach a redlined copy. Insert description

__________________________________________________________________________

(d) If other than STG Indemnity  Form, review and attach form of requested indemnity.

(e) If other than STG Indemnity Form, does the indemnity include a subordination of rights/claims by the indemnitor?    ___Yes   ___No       

(f) If other than STG Indemnity Form, does the original contractor subordinate its claims to the Insured Mortgage?  ___Yes   ___No       

(g) List known outstanding indemnities by Owner and indemnitor, if different, and original contractor. Insert description

___________________________________________________________________________

(h) Explain the authority of the indemnitor.

___________________________________________________________________________

6. FINANCIAL STATEMENTS. Please include/describe/attach:

(a) Attach financial statements of owner/borrower and indemnitor, if different, and each original contractor, as available, or state ”None” in the section above.

(b) Were these financial statements reviewed by Stewart personnel, and, if so, by whom, and what were the comments, if any? Insert description

(c) Are they audited financial statements?  ___Yes   ___No

(d) Are they current? Insert date above.  ___Yes   ___No 

7. SOURCES AND USES OF FUNDS. Please include/describe/attach as noted:

(a) Equity (land, cash, or other) to be provided by Owner or investors, and describe procedure, amount, and timing for contribution or investment. Insert description

____________________________________________________________________________

(b) If equity is to be contributed into an account, attach the applicable account agreement/escrow agreement and a schedule showing the timing and amount of the equity contributions.

(c) Construction loan funding by lender: Include monthly sources and amounts of funds and scheduled monthly uses/payments to be made to contractors. Scheduled milestone payments must be shown.

Insert description/attach

______________________________________________________________________________

(d) Are there or will there be any sales contracts (e.g., presales of condo units) and contract deposits?  If “yes”, will the construction loan mortgage have priority over potential vendees liens, etc., and if so, upon what basis (e.g., statute, case law, express subordination in contract, etc.)?

Insert description/attach

_______________________________________________________________________________

8. LENDER’S DISBURSEMENT PROCEDURES. Please include/describe/attach procedure, amount, and timing for disbursements:

(a) Frequency of disbursements (e.g., monthly). Describe frequency

_________________________________________

(b) Approximate amount of each disbursement.  $ _______________ 

(c) Approximate number of draws. _____________________________________ 

(d) Party who will be disbursing

Insert description

___________________________________________________________________________

(e) Parties (e.g., owner, original contractor and/or subcontractors) who will be paid directly by lender or lender’s disbursing agent or other party disbursing.

Insert description

_________________________________________________________________

(f) Documents that will be required by lender or other party before disbursement (e.g. form of lien waiver).

Insert description

_________________________________________________________________

(g) Attach copy of Loan Agreement/Credit Agreement/Disbursement Agreement

9. TITLE COMPANY’S PROCEDURES AT DISBURSEMENT.  Please include/describe/attach:

(a) Effective date of coverage (e.g. date of disbursement, date of invoices/waivers). Insert date  _______________

(b) Gap, if any, between effective date of coverage and date of invoices/waivers.

Insert description

______________________________________________________________________

(c) Waivers that will be obtained (and any limitations on enforcement under state law) and attach copies of the forms.

Insert description

_______________________________________________________________________

(d) Subordinations that will be obtained (and any limitations on enforcement under state law) and attach copies of the forms.

Insert description

_______________________________________________________________________

(e) Process for review and verification of waivers, review of title, procedure to determine that claimants are paid. Who will review?

Insert description and name

_______________________________________________________________________

(f) Procedure and timing for issuance of down date endorsements, and whether endorsement will be issued prior to current disbursement, and, if issued prior to current disbursement, what conditions, if any, will be placed in the down date endorsement conditioning the coverage on that disbursement.

Insert description

______________________________________________________________________________

10.  EXPOSURE THAT WILL EXIST FOR THE PROPOSED COVERAGE ON THE LOAN POLICY.

Please include/describe/attach:

(a) Analysis of subcontractors and contractors who will not be paid through date of conditional waivers. Insert description

_________________________________________________________________

(b) Gap between date of conditional waivers and date of down date endorsement.

Insert description

_________________________________________________________________

(c) Estimate of the dollar amount of exposure (for bills not paid through date of coverage) for each down date endorsement. Insert amount $ _________________ 

11. BACKGROUND AND HISTORY. Please include/describe/attach:

Background and experience (including suits and known mechanic’s lien claims) of:

(a) Owner (or family) and their principals, how long they have engaged in the applicable business, and their track record on prior transaction(s). Insert description

(b) Each original contractor.

Insert description

_______________________________________________________________________

(c) STG history with Owner (or family of companies) including past policies we have issued to lenders.

Insert description

_______________________________________________________________

(d) STG history with Contractor (or family of companies) including past policies we have issued to lenders.

Insert description

________________________________________________________________

(e) Are the Owner and/or principals privately owned or publicly traded?

Insert description

________________________________________________________________

(f) Has an analysis of the local market been performed by Stewart personnel, and, if so, by whom, and what were the comments, if any?

Insert description

_________________________________________________________________________________

12. OTHER/ADDITIONAL CREDIT ENHANCEMENTS.  Please include/describe/attach:

(a) Parent indemnity or other indemnity(ies), third party guaranty, advance equity deposit, Letter of Credit, bonds (e.g. payment and/or performance), escrow, or other means for mitigating risk.

Insert description

____________________________________________________________________________

Click here for a list of Mechanic’s Liens Documentation.

Project Name/Reference/Designation, if applicable:  

Prepared by:  

Print Name:   (same as Contact Person, above)

Print Date:  

NOTE: THIS APPROVAL, IF PROVIDED, RELATES ONLY TO THE MECHANIC’S LIEN COVERAGE AS PROPOSED, AND IS NOT THE HIGH LIABILITY  (OVERLIMITS)  APPROVAL FOR THE TRANSACTION  AND OTHER COVERAGE OR REINSURANCE APPROVAL, WHICH MUST BE SEPARATELY REQUESTED AND PROVIDED.

APPROVALS

(1) GENERAL COUNSEL OR CHIEF UNDERWRITING COUNSEL (OR DELEGEE), AND (2) TWO SLS SENIOR UNDERWRITERS.

MECHANIC’S LIEN COVERAGE IS APPROVED, SUBJECT TO THE FOLLOWING ADDITIONAL CONDITIONS:

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

 

___________________________
Chief Underwriting  Counsel Date

___________________________
Senior Underwriter Date

___________________________
Senior Underwriter Date

___________________________
Senior Underwriter Date

___________________________
General Counsel Date

 

Revised 07/25/17

 

High Liability (Over $40 Million) Mechanic’s Lien Coverage Approval Request

Supplement

Please use this area if you need additional space.

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For issuing guidelines on this form, see Guidelines.