In 2012, the American Land Title Association introduced the concept of “land under development” endorsements. Today we have seven different land under development endorsements that are available in the event that a title insurance policy is issued either prior to or during a construction or land development project.
The land under development series of endorsements provide insurance coverage based on development plans and specifications, defined as “Plans” in the endorsements. Each of the endorsements incorporates the plans by referring to their file or job number, original date, revision date, and surveyor, engineering company or architect that created the plans, along with the number of sheets in the set of plans. Accordingly, land under development endorsements should not be issued except on the final version of development plans in order to assure that nothing will change between the specified plans and the improvements as they are actually situated on the ground. If the improvements are not constructed according to the plans, and that deviation from the plans causes a violation that would otherwise be covered by the endorsement, the deviation from the plans may relieve the underwriter from liability under the endorsement.
The assurances that are given in the endorsements all tie back to the plans and insure against any loss or damage that the insured (whether it be the owner or the lender, as the endorsements can be issued in favor of either party) might suffer as a result of a failure of the development (the improvements) to be adequate based on the coverage extended by each of the endorsements.