View state supplements to the national underwriting manual.
All the forms of title policies that we issue exclude from coverage any loss or damage that the insured may sustain by reason of the violation of zoning laws or ordinances.
In those jurisdictions where it is permitted to give "zoning coverage" it should be offered through the issuance of ALTA Endorsement Form 3-Zoning or ALTA Endorsement Form 3.1 Zoning.
These endorsement forms do not delete the zoning exclusion contained in the policy. They merely modify the terms and provisions of the policy to the extent expressly stated in the endorsements.
ALTA Endorsement Form 3 (10/17/98) is designed to insure the insured under an owner's or loan policy of the following matters:
The endorsement contains three limitations:
This form of zoning endorsement may be issued with or subsequent to a policy insuring title to land regardless of whether such land is vacant, under construction or improvements completed.
ALTA Endorsement Form 3.1 (10/17/98) expands the coverage contained in Form 3 by additionally stating the following:
"The Company hereby further insures against loss or damage arising from a final decree of a court of competent jurisdiction:"
(a) prohibiting the use of the land, with any structure presently located thereon, as specified in paragraph 1(b) above; or, (b) requiring the removal or alteration of the structure on the basis, that as of Date of Policy, said ordinances and amendments thereto have been violated with respect to any of the following matters:
ALTA Endorsement Form 3.1 may be issued only when:
Refer to the Guidelines associated with the above endorsements for the general underwriting requirements to issue the Zoning 3.0 or the Zoning 3.1 endorsement.
There is usually an additional premium for a zoning endorsement.
Customers should be advised that the Company may decline to issue a zoning endorsement if we are unable to document compliance.
In some jurisdictions, the ability of the Company to issue a zoning endorsement is based upon an attorney opinion letter. In such cases, the following procedures should apply:
Whenever real estate is affected by a valid recorded restriction which limits or restricts the use of the land, any zoning change allowing the use that is prohibited by the restriction will have no effect whatsoever in relation to the existing restriction.