Endorsements,
which add or modify the coverage provided by a title policy, have become more
uniform over the years, being sanctioned by the American Land Title
Association. Endorsements that were once created and filed locally in Michigan
have given way to nationally standardized language. As such, they are periodically reviewed and
occasionally revised by the ALTA forms committee. While such revisions may often be minor
language adjustments, every so often more dramatic changes in the coverage are
approved by the ALTA and promulgated nationally.
A prime example
of this is the recent revisions of the ALTA 9 Endorsement, once identified as
the Restrictions, Encroachments, Minerals (“R.E.M.” or “Comprehensive”)
Endorsement. This Endorsement was first
used in the 1980’s to bundle affirmative coverages, which most lenders
routinely requested in connection with matters shown on Schedule B of the Loan
Policy or were not covered by that policy.
It insured the holder of the indebtedness (the lender) against loss or
damage resulting from a number of potential adverse matters.
Those matters
included possible violations of covenants, conditions and restrictions (CC&Rs),
encroachments of the improvements onto adjoining land or into easements on the
land, and damage to existing improvements as a result of the exercise of
mineral rights for extraction or development. Similar, although more limited
coverage of this sort was later provided with Owner’s Policies – the ALTA 9.1
for improved land and the ALTA 9.2 for unimproved land.
The ALTA forms
committee has carved up and created several variations of the former ALTA 9,
resulting in a virtual menu of ALTA 9 Endorsements, including variations when
the property is under development or has existing improvements. The issue of enforceable “Private Rights” is
another issue that may be afforded coverage for a Loan Policy. And, the new ALTA 9.1 and 9.2 Endorsements now
only provide CC&R coverage. There
are separate endorsements created to deal with coverage for encroachments and
the exercise of mineral rights. Through
this all, the basic ALTA 9 for Loan Policies is still intact. But, it becomes
rather clear that the endorsement landscape is a continually changing one. Check with your experienced commercial title
professional at BHT Commercial, if you have any endorsement or title coverage
questions.
