LA ALTA Endorsement Form 4 Condominium

Organizational Guidelines

LA ALTA Endorsement Form 4 Condominium

Guideline Document
V 1


The condominium endorsement may be issued in connection with the issuance of a mortgagee's policy on a residential unit of a condominium. Each of the separately stated coverage's contained in the condominium endorsement may be issued either with or without the others.

Underwriting Requirements:

This endorsement to the mortgage policy insures that the condominium project was created in accordance with state law, that there are no maintenance liens or forfeiture provisions with priority over the lien of the insured mortgage, and that there can be no exercise of a right of first refusal in connection with the current or prior transactions. Underwriting requirements are:

  1. The initial examiner of the condominium must verify that the condominium declaration
    complies with all statutory requirements and that any conditions to creation of the
    condominium (such as record evidence of completion in some states) have been met.

  2. All taxes for years prior to the time that the units are entitled to separate assessment must
    be paid.

    Note: It is recommended with new construction that you verify whether taxes will be assessed as separate units
    or notify the buyer to contact taxing authorities for billing information.

  3. The restrictions disclosed by the examination must not contain any forfeiture or
    reversionary provision (unless they are, by their express terms, subordinate to the lien of
    the insured mortgage).

  4. If the declaration creates a lien for maintenance assessments, all assessments outstanding
    for the period of time prior to closing must be paid and the declaration must state that the
    assessment lien is subordinate to the lien of the insured mortgage. In the states of
    Alabama, Alaska, Colorado, Connecticut, District of Columbia, Florida, Massachusetts,
    Minnesota, Nevada, Oregon, Pennsylvania, Rhode Island, Washington, and West
    Virginia state law provides that certain condominium assessments have priority over first
    mortgages. In those states, do not issue the ALTA Endorsement 4 on first mortgages
    unless you delete paragraph 4 or unless you add an exception pursuant to our local
    underwriting guidelines; otherwise, you should issue the ALTA 4.1 endorsement in those
    states or you should secure specific underwriter approval. In many states, assessment
    liens are superior to all mortgages except first mortgages. In all states issue only the
    ALTA 4.1 endorsement on Loan policies covering subordinate mortgages unless you
    secure Underwriter approval to issue the ALTA 4 endorsement.

  5. If the declaration creates a right of first refusal, you must verify with the association that
    the right is waived or ineffective as to the current and prior transactions.

  6. If the condominium creates commercial condominium units, then you must verify that
    any prior restrictions do not prohibit use for commercial purposes; otherwise, you must
    delete the first sentence of paragraph 3.

  7. Have your abstractor run the condominium name to verify that all amendments to
    condominium declarations have been obtained.

Do not issue this endorsement if you know of any significant encroachment or boundary

Coverage differences between a 4.0 and a 4.1 are located in coverage item #4.

Charge: $75.

Any revision to this form requires approval of a Stewart Title Guaranty Company underwriter. The underwriting guidelines contained herein have been provided for general reference. The facts, circumstances, and location of the subject property should be considered when determining the issuance of the requested form or endorsement. Please note that all of the forms and endorsements included in this system may not be available in all states. Accordingly, please contact the appropriate Stewart Title Guaranty Company underwriting personnel in order to determine availability.

Compliance with the underwriting guidelines contained herein in no way obligates Stewart Title Guaranty Company to issue any form or endorsement.

This guideline applies to the following form(s):
  • None