The minimum premium for this endorsement is ten percent (10%) of the premium for the loan policy OR, if the loan policy is being issued simultaneously with an Owner’s policy, the minimum premium is ten percent (10%) of the total premium for the Owner’s and Loan Policies.
Subject to the Exclusions from Coverage, the Exceptions from Coverage contained in Schedule B, and the Conditions of the Policy, this ALTA 9-06 Endorsement may be used to provide affirmative coverage on a Loan Policy against encroachments, set back violations and other matters set forth below. This 9-06 Endorsement contains EIGHT (8) forms of affirmative coverages as follows:
- Subparagraph 1(a) insures there are no covenants, conditions or restrictions under which the insured mortgage can be divested, subordinated or extinguished or its validity, priority or enforceability impaired. Due to Section 720.3085, Florida Statutes, all loan policies insuring a mortgage subject to homeowner’s assessments executed and recorded after July 1, 2008, must contain the following exception:
“Any loss or damage caused by a lien for homeowner’s association liens pursuant to Section 720.3085, Florida Statutes, notwithstanding assurances to the contrary in the Restrictions, Easements, Minerals Endorsement, if any, attached.”
As to any mortgage executed and recorded prior to July 1, 2008 subject to homeowner’s assessments, in order to provide the coverage under Subparagraph 1(a) of this endorsement it is necessary to confirm that the recorded restrictions do not provide that the lien for assessments is effective as of the date of recording of the restrictions (instead of claim of lien) or that such lien does not otherwise have express priority over the lien of mortgages; otherwise, this coverage must be deleted.
Due to Section 718.116 Florida Statutes, all loan policies insuring a mortgage on a condominium unit must contain the following exception:
“Any loss or damage caused by a lien for condominium assessments pursuant to Section 718.116(5)(a), Florida Statutes, notwithstanding assurances to the contrary in the Restrictions, Easements, Minerals Endorsement, if any, attached.”
- Subparagraphs 1(b)(1),(3),(4) and (5) insure that unless expressly excepted in Schedule B, there are: (a) no present violations of any covenants, conditions or restrictions or violations of building setback lines in such covenants, conditions or restrictions or on the subdivision plat; (b) no encroachments of improvements onto adjoining land or from adjoining land onto insured land; (c) no encroachments of improvements onto to any easement; and (d) no recorded notices of violation of covenants, conditions and restrictions relating to environmental protection. Therefore, if the survey discloses that there is any present violation of setback or other restrictive covenants, conditions or restrictions or any encroachment of existing improvements either onto adjoining land or from adjoining land onto the insured land or into easements, Schedule B must contain a specific exception to such (CAUTION: The survey will generally only show the building setbacks on the subdivision plat; therefore, if the building setbacks are contained in the restrictions, a copy thereof must be provided to the surveyor for adding to the survey). Also, Schedule B must contain a specific exception as to any recorded notice of a violation of any environmental covenant, condition or restriction.
- Subparagraph 1(b)(2) insures that unless expressly excepted in Schedule B, no covenants, conditions or restrictions : (i) establish an easement on the land; (ii) provide for a lien for liquidated damages; (iii) provide for a private charge or assessment; or (iv) provide for an option to purchase, a right of first refusal or the prior approval of a future purchaser or occupant. Therefore, any exception in Schedule B as to any covenant, condition or restriction which contains any of the foregoing provisions must specifically set forth such fact.
- Paragraph 2 insures that any future violation of any existing covenants, conditions or restrictions affecting the property will not result in the invalidity, loss of priority or unenforceability of the lien of the mortgage or result in a loss of title if the insured acquires title in satisfaction of the indebtedness secured by the mortgage. Therefore, if any recorded covenants, conditions or restrictions contain any forfeiture or right of reversion, this coverage must be delete
- Subparagraph 3(a) insures against damage to existing improvements (excluding lawns, shrubbery or trees) which results from the rights of a holder of the easement to maintain the easement for the purposes granted under the easement. Therefore, if an encroachment is of sufficient nature that, in the exercise of the rights under the easement, damages are likely to occur to the improvements on the property, this coverage must be delete (CAUTION: a specific exception to the encroachment in Schedule B is not sufficient to delete this affirmative coverage).
- Subparagraph 3(b) insures against damage to existing improvements (excluding lawns, shrubbery or trees) as a result of the future exercise of the right to use the surface of the land for the extraction of minerals pursuant to a mineral reservation excepted in Schedule B. Therefore, if the right of entry has not been expressly released or released by statue as to any mineral reservation excepted in Schedule B (excluding the general preprinted mineral exception #6), this coverage must be deleted in the manner hereafter set forth. (CAUTION: a specific exception to the mineral reservation in Schedule B is not sufficient to delete this affirmative coverage).
- Paragraph 4 insures against a final court order or judgment requiring removal from any land adjoining the insured land of any encroachment excepted in Schedule B. Therefore, if any improvement encroaches onto adjoining land and is of a nature which is not easily removable, this coverage must be delete (CAUTION: a specific exception to the encroachment in Schedule B is not sufficient to delete this affirmative coverage).
- Paragraph 5 insures against a final court order or judgment denying the right to maintain existing improvements on the land because of a violation of any covenants, conditions or restrictions or violations of the building setback lines in such covenants, conditions or restrictions or on the subdivision plat. Therefore, if any of the existing improvements violate any of the covenants, conditions or restrictions or the building setback lines in such covenants, conditions or restrictions or on the subdivision plat and such violation is not minimal in nature, this coverage must be deleted. (CAUTION: a specific exception to the violation in Schedule B is not sufficient to delete this affirmative coverage).
Deletion of coverage: In all cases in which a portion of the coverage afforded by this Endorsement must be deleted as indicated above, this should be accomplished by adding to the exception substantially the following phrase:
“Coverage afforded under (insert appropriate Paragraph #) of the Restrictions, Easements, Minerals Endorsement, if any, attached as to this exception is not available and is hereby deleted from said endorsement.”
The applicable Subparagraph # should be inserted in the blank space of the above exception:
Subparagraph 1(a) — As to mortgages recorded prior to July 1, 2008 subject to homeowner’s restrictions or covenants with “super lien priority”
Paragraph 2 — As to any restrictions containing a forfeiture or right of reversion Subparagraph 3(a) — As to damage to improvements which result from encroachments into easements
Subparagraph 3(b) — As to mineral reservations for which the right of entry has not been released
Paragraph 4– As to encroachments onto adjoining land
Paragraph 5– As to violations of restrictions and/or building setbacks
