How to get the best title coverage for your client (part 13) Special Form Endorsements

Special Form Endorsements

a. Affirmative Coverage (except unmarketability) (1-1-94)

The affirmative coverage endorsement amends the policy to insure the Insured against any loss or damage resulting from a recorded defect, lien or encumbrance, which is listed as a Schedule B exception and is identified within the endorsement.

b. Bona-fide Purchaser (1-1-94)

The bona fide purchaser endorsement assures the named insured that paragraph 3(e) of the exclusions from coverage will not be used by the Company to deny coverage, solely because the insured lacks the status of a bona fide purchaser for value. The endorsement further provides that exclusion 3(b) remains in effect. Item 3(b) concerns the insured's knowledge of the lien, defect, encumbrance, adverse claim or other matter.

c. Doing Business As (1-1-94)

The "doing business as" endorsement provides insurance against loss due to a final court order or judgment which denies the enforceability of the mortgage/deed of trust because the lender failed to qualify to do business in the state where the property covered by the lien of the mortgage/deed of trust is located.

d. Environmental (commercial) (lender's) (1-1-94)

Except as set forth in Schedule B, the environmental endorsement insures against the lack of priority of an insured mortgage or deed of trust over an environmental protection lien recorded under Washington statutes or filed in the United States District Court.

e. Extension of Maturity Date (1-1-94)

The extension of maturity endorsement provides assurance to the insured that a mortgage/deed of trust modification extending the maturity date does not affect the priority of the insured lien.

f. Fairway (Partnership Transfer) (1-1-94)

The Fairway endorsement insures that policy coverage shall not lapse by reason of the admission, withdrawal or change in the percentage interest of a partner, provided that these events do not cause a dissolution of the partnership pursuant to state law or partnership agreement.

g. First Loss Endorsement (1-1-94)

The first loss endorsement insures that a loss, if it exceeds a certain percentage of the face amount of the policy, will immediately trigger the company’s liability without first requiring the lender to accelerate the debt or pursue remedies against other collateral.
h. Intervening Lien (a/k/a "Seattle" or "Patterson") (1-1-94)

Under certain circumstances, the intervening lien endorsement amends ALTA loan policy coverage by limiting paragraph 3(a) of the exclusions from coverage. The endorsement is designed to protect a lender's loan priority from mechanic's liens that result because the lender failed to disburse the loan or lend a sufficient sum to complete construction.

i. Non-Imputation (1-1-94)

The non-imputation endorsement defines paragraph 3(b) of the exclusions from coverage to provide assurance that the Company will not assert a "knowledge of the insured" defense based upon imputed knowledge from a related party to deny liability under the policy.

j. Pro Tanto (1-1-94)

The pro tanto endorsement enables multiple policies to be issued on the same property to different parties, with a single financial risk. If payment is made under one policy, the liability (the amount of money that the Company could be obligated to pay) remaining under all of the policies is reduced simultaneously.

k. Segregation of Liability (1-1-94)

The segregation of liability endorsement allows the Company to limit is liability by defining how it will pay a claim on a policy insuring interests in multiple parcels. The endorsement provides that a claim of loss affecting one parcel will be computed as if the amount of insurance was apportioned based on the value of the affected parcel.

l. Spreading (1-1-94)

The spreading endorsement allows a policy to be amended by adding additional parcels of land to Schedule A and any exceptions that affect those parcels to Schedule B. The policy is not otherwise updated.

m. Subdivision C (owner's) (1-1-94)

The subdivision C endorsement insures the owner against loss or damage due to final court order declaring that all the land described in Schedule A is in violation of the state statutes and related local laws or ordinances concerning a separation in ownership of the land or a change in dimensions of the land prior to the date of policy. This endorsement limits paragraph 1 of the exclusions from coverage.

n. Subdivision D (owner's) (1-1-94)

The subdivision D endorsement assures the insured that the land is not in violation of the state subdivision statutes and related local laws or ordinances. This endorsement limits paragraph 1 of the exclusions from coverage.

o. Subsequent Improvement (1-1-94)

The subsequent improvement endorsement amends paragraph 6 of the conditions and stipulations in the 1970 policy form (paragraph 7 in the 1987 or 1992 policy form), so that any loss claim paid to the insured will be based on: 1) the full consideration for the land and improvements at the date of policy; and 2) the full consideration paid for subsequent improvements erected on the land prior to a notice of claim to the Company.

p. Successors and Assigns (1-1-94)

The successors and assigns endorsement provides assurance to the insured and its successors and assigns that the Company shall not deny liability by reason of successions or assignments described within the endorsement.

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