Many potential property buyers are aware of Owner’s and Lender’s Title Insurance Policies, but just as important are Title Endorsements, a lesser known part of title insurance. These Title Endorsements
are to be found on forms approved by ALTA, the American Land Title Association.
These Title Endorsements affect both Owner’s and Lender’s Title Insurance Policies and help delineate positions on such topics as surveys, environmental matters, covenants, subdivisions and zoning.
As part of its continued service to the industry, ALTA adds new ones and revises these endorsements regularly. For example, ALTA recently issued new endorsements focusing on land under development and the role of energy projects on such land. ALTA 13 endorsements, affecting leaseholds, and ALTA 9 endorsements that govern conditions, restrictions and covenants were also recently revised.
Some endorsements require satisfaction of specific requirements, such as in an endorsement about zoning. The title company won’t issue a zoning endorsement until it gets evidence that the property meets the zoning requirements, but with the endorsement, the evidence need not be as stringent as it would otherwise. Without such endorsement, a full-fledged Zoning
Opinion Letter would need to be provided to a commercial lender and that is an expensive process. The endorsement for such zoning may cost some money, but the amount is dwarfed by the expense of obtaining a Zoning Opinion Letter.
Other endorsements carry small charges of $100 or less, others are free, some (like the zoning example above) may cost thousands. In some states, title insurance is regulated in such a way that use of endorsements is very limited.
Consult with your real estate attorney about the Title Endorsements Insurance available to you in your transaction. Such endorsements may be the quickest, easiest and least expensive way of handling any legal defects your property may have.
The American Land Title Association (ALTA) has more information on Title Endorsements.