- December 12, 1991
- All Issuing Offices in Alabama, Alaska, Colorado, Connecticut, Florida, Nevada, Oregon, Pennsylvania, Rhode Island, Washington, West Virginia
- Condominium Assessment Lien Priority
All offices issuing policies in any of the above states should be aware that relevant state laws provide that condominium assessment liens have limited priority over first mortgages. The amount of assessment having priority ranges from six months to five years. Paragraph 4 of ALTA Form 4 Endorsement, the condominium endorsement, insures a lender against loss or damage by reason of the priority of any assessment lien over the lien to be issued. Because of the priority of the assessment liens, Company policy requires that any ALTA Form 4 Endorsement issued in any of the above states have paragraph 4 of the endorsement deleted. You may accomplish this by x-ing through the paragraph with a typewriter.
Within the next few weeks, a supply of ALTA Form 4 Endorsements will be printed with paragraph 4 deleted. Thereafter, any orders for ALTA Form 4 originating in the above states will receive ALTA Form 4 with paragraph 4 deleted.
You should also note that ALTA Form 9 Endorsement, the so-called Comprehensive Endorsement, contains paragraph 2 which provides insurance against loss due to the existence of provisions in covenants and restrictions which would create a loss of priority of the insured lien. Because assessment lien priority would affect the priority of the insured lien, if you are asked to issue an ALTA 9 on a condominium unit, you must delete all of paragraph 2 from the Form 9. The Company does not plan on printing ALTA Form 9 Endorsements with paragraph 2 deleted.
In addition, if you issue any master policy or short form policy in which the Form 4 or Form 9 is incorporated into the coverage by marking a box, it will be necessary for you to include (with the certificate or short form policy) an addendum deleting the appropriate paragraph(s) from the incorporated endorsement(s) if you have included the coverage in the policy. Blank addendums are available from the Forms Department in Houston.
In addition to filing this Bulletin in your Bulletin binder, you should place a copy in your Underwriting Manual, Volume I, under "Condominiums" Section 3.40.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.
- Bulletins Replaced:
- Related Bulletins:
- Underwriting Manual:
- 3.40 Condominiums
- Exceptions Manual: