LA ALTA Endorsement Form 9 (Restrictions, Encroachments, Minerals)
Explanation:This comprehensive endorsement is issued in conjunction with a mortgagee's policy and provides coverage regarding violations of covenants, conditions, and restrictions.
The underwriting requirements are as follows:
- Review all restrictions to verify that there are no forfeiture provisions
unless the forfeiture provisions are expressly subordinate to the lien of
the insured mortgage; otherwise, paragraph 1(a) and paragraph 2 must be deleted.
- Review the restrictions to verify whether the existing use materially violates
applicable restrictions. If so except to the violation in Schedule B.
- Review the restrictions to verify whether the restrictions create maintenance
liens, easements, options, or rights of first refusal to purchase. If so,
these provisions must be separately and explicitly listed in Schedule B as
noted in paragraph 1(b)(2) of the endorsement.
- You must review the restrictions to verify that any maintenance lien created therein is expressly subordinate to the lien of the insured mortgage and that prior assessments are paid before closing; if there is a maintenance lien created by the restrictions which is not expressly subordinate to the lien of the insured mortgage, then you must delete paragraphs 1(a) and 2 of the endorsement.
- Unless local underwriting guidelines by the Company provide otherwise, secure
a survey by an acceptable surveyor reflecting the current improvements. You
must except in Schedule B to any encroachments over building lines, property
lines, or easements reflected by the survey.
- In order to afford the coverage provided in paragraph 3(a), 4 and 5 of this endorsement as to damage by reason of removal of encroachments, the encroachments must be minor in nature and may not include an encroachment of any permanent improvements onto adjoining land unless the Company authorizes such coverage.
- In order to provide the coverage of paragraph 3(b) by reason of damage to
the surface by development of minerals on commercial property, you must verify
that there are no outstanding minerals or that surface rights have been waived
unless the Company agrees otherwise. Other factors of relevance are as follows:
per cent of minerals outstanding, zoning prohibitions, waivers of surface
rights, and development in the area. On residential property consisting of
single family residences within platted subdivisions in municipal limits,
you may provide this coverage even if there are outstanding mineral interests
unless the area is subject to actual mineral development and production; otherwise,
you should delete
Charge: Ten percent (10%) of the original rate, with a minimum rate of $150.
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