VA Pending Disbursement Clause (“RESTPEND”)

STEWART TITLE GUARANTY COMPANY

PENDING DISBURSEMENT CLAUSE (“RESTPEND”)

Pending disbursement of the full proceeds of the loan secured by the Mortgage or Deed of Trust described in Schedule “A” hereof, this policy insures only to the extent of the amount actually disbursed. This policy insures against any loss or damage which might result from claims of mechanic's liens arising from nonpayment of bills for labor performed or material furnished prior to __________________, but said coverage is limited to mechanic's liens relating to those amounts actually paid and only to mechanic's liens by those persons or entities receiving said payments directly pursuant to written disbursement authorization by Insured to Company and approved by the Insured herein; except any such liens or notices thereof as may be recited under Schedule B hereof. At the time of each disbursement of proceeds of the loan, an endorsement to this policy must be secured increasing the amount insured hereunder up to the face amount of the policy, subject to the following requirements being met before issuance of such endorsement that: (a) the company is furnished evidence from the insured certifying that the disbursement has been made in good faith and without knowledge of any defect in, or objection to the title, (b) a title search by the Company reveals no liens, objections or any other adverse changes in the title, (c) the contractor and owner furnish this company satisfactory paid bills, lien waiver, or other evidence that all items from which a lien might arise, have been paid or otherwise satisfied, and (d) the owner and Contractor furnish the Company satisfactory Affidavit and Indemnity Agreement(s) as to the matters referred to in (c) above.

This policy does not insure against mechanic's liens for labor performed and materials furnished subsequent to the last date to which mechanic's lien coverage has been extended, nor does this policy guarantee completion of the improvements in progress, or their compliance with plans and specifications. The company in no way guarantees the sufficiency of the mortgage proceeds as adequate to complete said improvements.

Notwithstanding any other language contained in the insuring provisions of this policy, the above provisions are the sole provision applicable to the extension of coverage for loss or damage resulting from mechanic's liens or claims of such hens not of record.

This endorsement is made a part of the commitment or policy. It is subject to all the terms of the commitment or policy and prior endorsements. Except as expressly stated on this endorsement, the terms, date, and amount of the commitment or policy and prior endorsements are not changed.

 

Disbursement Endorsement Example 2

ENDORSEMENT TO TITLE POLICY
SERIAL NUMBER M

FILE NO: ____________

ISSUED BY
STEWART TITLE
GUARANTY COMPANY
HEREIN CALLED THE COMPANY
DISBURSEMENT ENDORSEMENT EXAMPLE 2 - VIRGINIA
(RESTPEND)

IT IS HEREBY AGREED AND UNDERSTOOD THAT THE ABOVE TITLE POLICY IS AMENDED TO READ AS FOLLOWS:

 

Upon disbursement of the amount shown at (b) below in connection with subject property, we hereby extend the date of our title insurance policy to the date below increasing the coverage to the amount stated in (c) below; and further, we insure against loss or damage which may result from the claims of mechanic’s liens arising from non-payment of bills for labor performed or materials furnished prior to ______________, but said coverage is limited to mechanic’s liens relating to those amounts actually paid and only to mechanic’s liens by those persons or entities receiving said payments directly pursuant to written disbursement authorization by Insured to Company and approved by the Insured herein, except any such liens or notices thereof recited under Schedule B of the subject policy, and except such liens arising from “retention” funds withheld from contractors, subcontractors or supplies out of mortgage loan proceeds or failure of the assured to advance sufficient funds to cover the cost of all of the construction completed prior to the date of assureds disbursement as set out in (b) below.

 

(a) Total Disbursed Previously : $

 

(b) Present Disbursement : $

 

(c) Total Disbursement to date : $

The following exceptions are hereby added to Schedule B, of said Policy:

Note: Taxes are not further examined.

 

Nothing herein contained nor in the policy previously issued shall subject Stewart Title Guaranty Company to liability for the completion of the improvements presently under construction of the insured premises or to liability for non-compliance with plans and specifications in connection with the construction, and Stewart Title Guaranty Company in no way guarantees the sufficiency of the mortgage proceeds as adequate to the complete said improvements. This endorsement is made a part of the policy referred to above and is subject to schedules, conditions and stipulations therein, except as modified by the provisions hereof.

Policy Extended To:

 

This Endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, this Endorsement neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and prior endorsements, nor does it increase the face amount thereof

 

Signed under seal for the Company, but this Endorsement is to be valid only when it bears an authorized countersignature, this the ________ day of _____________ 201___.

 

PLAN "B-1 (mod)"
BUILDER/GENERAL CONTRACTOR DISBURSEMENT
(MODIFIED)

 

 

I.                                                               I.  BUILDER SUBMITS REQUISITION TO LENDER PRIOR TO DRAW. AGENT OBTAINS COPY OF REQUISITION WITH SUPPORTING INVOICES

II.                                                             II.  REVIEW INVOICES TO DETERMINE:

1. THEY ARE CURRENT

2. THEY ARE ONLY FOR WORK PERFORMED ON YOUR PROJECT

 (THE BUILDER/GENERAL CONTRACTOR CAN ASSIST YOU BY

PROVIDING A LIST OF PAYABLES FROM THEIR COMPUTER THAT CAN SIMPLY BE MARKED UP TO INDICATE WHAT IS BEING PAID OUT OF THIS SPECIFIC DRAW.)

III.                                                           III.  THE LIST MUST CONTAIN THE FOLLOWING:

               NAME OF SUBCONTRACTORS/SUPPLIERS                                  $AMOUNT OF CHECK

                    (LINE BY LINE)                                        -.                                            (INCLUDE CHECK#'S)

 

 

 

                TOTAL HARD COSTS                                                                                $TOTAL OF SUB/SUPPLIER CHECKS

 

 

 

                    TOTAL SOFT COSTS                                                                             $TOTAL SOFT COSTS

                    (YOU MUSTHAVE A BREAKDOWN IN

                    YOUR FILE ACCOUNTING FOR THESE FUNDS)

      TOTAL AMOUNT OF DRAW                                                                     $SOFT & HARD COST TOTAL

 

 

 

IV. PRIOR TO NEXT DRAW YOU MUST HAVE ALL SUBCONTRACTOR/SUPPLIER LIEN WAIVERS IN HAND.                                                                                                                  

Possible coverage for an owner during the construction phase; please obtain prior approval from STGC:

 

[old Exhibit X form]

AS TO THE PROPOSED OWNER’S POLICY:

“Pending such time as the improvements contemplated upon the insured premises shall be commenced, liability hereunder shall be limited to $ ______________, the purchase price paid for the land; but as and when the erection of such improvements shall be commenced, liability hereunder shall increase, as the improvements progress, in the amount of the cost thereof, up to the face amount of this Commitment or Policy.”

No guidelines are available for this form at this time.