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What You Need to Know About Title Insurance Endorsements in AZ?

Insurance Endorsements

Endorsements are used to expand – or otherwise modify – the coverage of a title insurance policy on real property. Today we’re discussing the important aspects of title insurance endorsements in AZ.

There are various title insurance policies made available to owners of real property by title companies including standard coverage, ALTA (American Land Title Association) extended coverage, ALTA residential and ALTA homeowner’s coverage.

The ALTA policies and other forms of title insurance policies most likely provide adequate coverage for most real estate transactions, without the necessity of expanding coverage through the use of endorsements.

However, if a transfer is not basic, or if there are issues particular to a specific transaction, the policy coverage may need to be expanded in order to protect the homeowner, the seller or the lender involved in the transaction.

Title insurance endorsements in AZ can modify any part of the policy, although they are most typically used either to extend or expand the title policy for more comprehensive coverage in order to address a particular title issue affecting, or potentially affecting the real property.

The following are some of the endorsements most commonly used by both buyers and lenders in real estate transactions.

Environmental Protection Lien: This endorsement does not, in fact, provide coverage for environmental protection.  Rather, this endorsement provides affirmative coverage ensuring that no document in the public records, affecting the real property, shows an environmental lien or notice of enforcement of alien.

Assessments: This endorsement is designed for use with the ALTA Lenders Policy to provide the insured lender with protection against loss sustained by reason of any assessments for items such as street improvements, which have priority over the lien of the deed of trust or insured mortgage, and which are either under construction or completed as of the date of the endorsement.

Survey: This endorsement is designed for use with the ALTA Owners Policy and provides assurance to the title policyholder that the land is the same as that delineated on the plat of survey attached to the policy.

Contiguous Land: These title insurance endorsements in AZ are also designed for use with an ALTA Owners or Lenders Policy for contiguous land concerns. Commonly, this endorsement would be requested when a purchaser acquired land adjacent to property already owned by the purchaser and it is intended that the two parcels be used together.

Federal Truth in Lending: This endorsement covers a lender for a loss arising from a judicial determination terminating the lien of the insured mortgage (deed of trust), under the rights provided by the Federal Truth in Lending Act or Consumer Credit Protection Act to cancel a contract.

Zoning – Unimproved Land: This endorsement insures certain zoning matters as they relate to unimproved property. The endorsement specifies the zoning classification and the use(s) permitted for the property.

Zoning – Improved Land: Like the endorsement covering zoning matters for unimproved land described above, this endorsement describes the zoning classification and permitted uses for the improved property.

Access: This endorsement provides assurances to the insured that (a) the named street is a physically-open public street, (b) that the property in question abuts the street and (c) that there is nothing to prohibit access from the property to the street.

Fairway Endorsement.  When purchasing title insurance, if the owner of the property is a limited liability company (LLC), the entity should consider requesting Fairway title insurance endorsements, which protect against any lapse of coverage resulting from a change in the membership of the limited liability company or from any resulting dissolution.

Foundation: This endorsement is used with the ALTA lenders policy where a construction loan previously has been insured and the lender, prior to making an advance, requires assurance from the title insurer that the foundations do not encroach upon adjoining lands or violate existing covenants, conditions and restrictions affecting the property.

Still, have questions? If you would like more information regarding title insurance endorsements in AZ, give us a call today to schedule a consultation.