1. PURPOSE:
Provides comprehensive coverage to an insured lender for loss concerning violations of
restrictive covenants, homeowners association charges and assessments, encroachments and the exercise of preemptive options or rights of first refusal to purchase, all pertaining to land located in a planned unit development.
2. APPLICABLE POLICIES:
May be issued with a Loan Policy covering residential real property.
3. PROCEDURAL RULE: P-9b(14)
“A Company may issue its Planned Unit Development Endorsement (T-17) to Mortgagee Policy, if its underwriting requirements are met and if it is paid the premium prescribed in Rate Rule R-11(l). The Company may delete any insuring provision if it does not consider that risk acceptable. The Company may not issue the Planned Unit Development Endorsement (T-17) if the land covered by the policy is not residential real property. Any insurance matter that may be covered by a Planned Unit Development Endorsement (T-17) may be insured only by the use of the Planned Unit Development Endorsement (T-17).‖
NOTE: The P-9b(14) states that the corresponding rate rule for this endorsement is found in ‗R-11(l)‘. However, the applicable rate rule for the Planned Unit Development Endorsement (T-17) is found in Rate Rule R-11(k). The rate rule was re-numbered pursuant to Commissioner Order No. 10-0960, 2008 Texas Title Insurance Biennial Rate Hearing.
4. UNDERWRITING REQUIREMENTS:
In order to issue this endorsement, you must adhere to the following guidelines contained in the checklist:
PLANNED UNIT DEVELOPMENT ENDORSEMENT CHECKLIST
The property must be residential real property located within a platted subdivision or a condominium unit.
Note: The T-28-Condominium Endorsement is available for condominium units and if you are issuing the Condominium Endorsement, you may not also issue the T-17 Endorsement.
An acceptable survey that complies with Procedural Rule P-2 and our underwriting requirements is required. If you do not have a survey, contact Regional Underwriting.
© 2011 Fidelity National Title Group, Inc. 160 Updated Feb. 2012
You must carefully review the restrictive covenants (―CCRs‖), surveys and, if necessary, perform a personal inspection to confirm there are no violations of the CCRs which restrict the use of the land (i.e.- commercial or business use where restricted to residential). You must also confirm that the CCRs do not contain any provisions which will cause a forfeiture or reversion of title.
If there is a violation or a provision providing for forfeiture or reversion of title, paragraph 1 must be deleted or contact Regional Underwriting.
Homeowner assessment lien must be subordinate to the insured lien.
Examine the CCRs and/or Homeowner Association documents to confirm that the lien of the insured mortgage has continued priority over any lien for charges and assessments in favor of any homeowner association.
If assessment lien is not subordinate, you may obtain a satisfactory subordination agreement from the HOA or paragraph 2 must be deleted.
There are no structures (except a boundary wall or fence) that encroaches to the adjoining property (including common area) or an easement. Review the survey to determine if any structures on the property encroach onto any easement or adjoining property.
If encroachment exists, paragraph 3 must be deleted UNLESS one of the following is applicable:
i) the insured land is a 1 to 4 family platted lot that is improved, but not new construction, or is unimproved;
ii) there is a permanent building over utility or drainage easement by no more than 50% width of easement;
iii) there is a temporary or removable structure over an easement or onto adjoining property lines; or
iv) there is an encroachment of curbs, pavement, driveways, landscaping over recorded easements or onto adjoining property.
There must be no right of first refusal in the CCRs or reserved in the chain of title.
If a right of first refusal exists, paragraph 4 must be deleted, OR you must obtain a written waiver of such right signed by both the selling owner and the holder of the right of first refusal.
5. RATE RULE: R-11.k - $25.00 for one or more simultaneously issued policies
―Endorsement issued as provided in Rule P-9b(14)----When the Planned Unit Development Endorsement (T-17) is issued with a Mortgagee Policy in accordance with Rule P-9b(14), the
premium for the Planned Unit Development Endorsement (T-17) shall be $25.00. If the Company issues the Planned Unit Development Endorsement (T-17) on two or more title insurance policies which are issued simultaneously covering the same land, then the premium for the Planned Unit Development Endorsement (T-17) shall be charged only for one Planned Unit Development Endorsement (T-17).‖
6. COMPLETING THE FORM:
Insert the following information in the endorsement form:
a. Loan policy number;
b. Date of endorsement; and
c. If applicable, delete any insuring provision that the Company does not consider to be an acceptable risk:
Deletion Of An Insuring Provision In Its Entirety
If pre-printed forms are included as part of the policy, the insuring provision should be deleted by manually striking through and initialing the provision, or deleting it
electronically and inserting the following in its place: ―Insuring provision ____ is hereby deleted.‖
If the Schedule A of the policy incorporates by reference an endorsement from which coverage will be deleted, you must include a specific reference on Schedule B: ―Insuring provision ___ of the Planned Unit Development Endorsement (T-17) incorporated by reference in this policy is hereby deleted.‖
Partial Deletion Of An Insuring Provision
If an insuring provision should be deleted as to a specific title matter (i.e., an
encroachment, homeowners‘ association lien) you should take exception to the specific title matter in Schedule B and insert the following immediately after the applicable exception in Schedule B: ―Insuring Provision __ of the Planned Unit Development Endorsement (T-17) is hereby deleted as to this exception.‖
© 2011 Fidelity National Title Group, Inc. 162 Updated Feb. 2012