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Which Endorsements to Policy Coverage Do Lenders Commonly Require? A standard title insurance policy does not cover everything – many things are left unprotected. So, if you apply for a loan to finance your purchase of property, your lender/ mortgagee will require that you obtain endorsements to your standard title insurance policy. The endorsements that Florida lenders most commonly require property owners to purchase are listed below: - Restrictions, Easements, Minerals: Unimproved Land (Florida Endorsement Form 9.1): It protects unimproved land (i.e. land which has not been developed) against loss or damage sustained as a result of: (a) present violations of enforceable covenants; (b) notices of violation of covenants or restrictions relating to environmental protection that have been recorded and filed in the public records; (c) encroachments onto land by existing improvements that are located on adjoining land; or (d) some damage to buildings constructed on the land after the policy date.
- Restrictions, Easements, Minerals: Improved Land (Florida Endorsement Form 9.2): It protects improved land as Form 9.1 protects unimproved land, but, also, it insures against loss resulting from a court order prohibiting the insured use of land, or compelling the removal or alteration of a structure on the land, due to certain specific zoning violations.
- Environmental Protection Lien Endorsement (Florida Endorsement Form 8.1): When a loan is secured by a deed of trust or mortgage on property that is used primarily for residential purposes, this endorsement provides the insured lender with protection against loss or damage sustained by reason of loss of priority of the lien of the insured mortgage over environmental protection liens recorded in the public records or created pursuant to certain state statutes.
- Variable Rate Mortgage Endorsement: It affords the insured lender protection against loss or damage sustained by reason of invalidity, loss of priority or unenforceability of the lien of the insured mortgage due to changes in the rate of interest (variable rate, convertible, renegotiable rate, adjustable rate or shared appreciation mortgages).
- Condominium Endorsement: It insures that the condominium estate has been created in accordance with local laws, and, further, that there are no charges or assessments which are due and unpaid as of the policy date. This endorsement also protects against loss sustained due to (a) present violations of enforceable covenants, conditions and restrictions; (b) an obligation to remove any improvements to the property which are in existence on the policy date, because of present – or certain, unintentional future – encroachments on other units; and (c) failure of title by reason of a right of first refusal to purchase the unit which was or could have been exercised on the policy date.
- Planned Unit Development (PUD) Endorsement: It protects planned unit developments as the Condo Endorsement protects condominium units (see above).
Contact an Experienced Title Insurance Lawyer If you would like more information about this topic, contact Lawrence Tolchinsky to find out how he can help you. You can contact him by phone at 954-458-8655 or by e-mail through this web site to schedule an appointment and learn more about title insurance. He offers a free initial consultation. To learn more about Lawrence Tolchinsky, click on this link: Florida Title Insurance Attorney
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