Endorsements are used to customize a general policy of title insurance to meet the customer’s specific needs. Because of this, it is difficult to put together a list of endorsements that would meet everyone’s needs in any one transaction, let along to compile a single list of endorsements that would apply to every transaction.
Standard ALTA Endorsements
That being said, the American Land Title Association (ALTA) has developed a number of “standard” endorsements which are often requested. Even so, the applicability of these endorsements must be determined on a case by case basis.
The earliest ALTA endorsements were designed primarily for use with residential risks. Those risks which were particularly of concern to investors in the secondary mortgage market were addressed through standard endorsements designed to protect residential lenders. These endorsements include: Street Assessments (ALTA 1), Truth in Lending (ALTA 2), Condominium (ALTA 4 and 4.1), Planned Unit Development (ALTA 5 and 5.1), Variable Rate Mortgage (ALTA 6, 6.1 and 6.2), Manufactured Housing (ALTA 7), and Environmental Protection Lien (ALTA 8.1).
Other ALTA Endorsements
Other ALTA endorsements are generally recognized as relating to commercial transactions, rather than residential transactions. Historically, the commercial ALTA endorsements were limited to Zoning (ALTA 3 or 3.1), Comprehensive (ALTA 9, 9.1 or 9.2), Mortgage Assignment (ALTA 10), Mortgage Assignment and Date down (ALTA 10.1), Mortgage Modification (ALTA 11) and Aggregation or Tie-In (ALTA 12).
Between 2001 and 2004, additional Commercial Transaction oriented endorsements were added. These include Leasehold (ALTA 13 and 13.1), Future Advance (ALTA 14, 14.1 and 14.2), Non-Imputation (ALTA 15, 15.1, and 15.2), Mezzanine Financing (ALTA 16), Access and Entry (ALTA 17 and 17.1), Tax Parcel (ALTA 18 and 18.1), Contiguity (ALTA 19 and 19.1), First Loss (ALTA 20) and Creditors Rights (ALTA 21)
Locally and regionally additional endorsements have been used regularly and become a “standard” for that area. Other endorsements can be crafted to meet specific concerns in a given transaction.
Evaluate Your Commercial Real Estate Transaction
Before requesting endorsements, it is important to evaluate your transaction and identify the specific concerns for which you want additional coverage. We will need to understand what coverage you are looking for and may ask for additional information to evaluate the risk of issuing such coverage.
Some of the most commonly requested endorsements, in our experience, are: Comprehensive, Contiguity, Access Survey, Revolving Credit Endorsement, Variable Rate, Tax Parcel, and Zoning.
For more detail about endorsements, please contact our sales and marketing department to arrange for a seminar.