Contracts for Sale
In some states, the Company may insure a contract purchaser if the Company's requirements are met.
Proof of Forfeiture
Terms and provisions of Contract for Sale between ____________, Seller, and ____________ Buyer [recorded ____________]. The Company requires for review a judicial declaration of forfeiture or a release in recordable form of the Contract for Sale by the Buyer. At the time the Company is furnished this item, the Company may make additional requirements or exceptions.
Comment: If you are informed or suspect that a known contract has been forfeited, use this requirement. In some jurisdictions, an affidavit may be an acceptable alternative.
See Underwriting Manual
Insuring the Contract - Review a Copy
The Company requires for review a copy of the contract for sale covering the land. At that time, the Company may make additional requirements or exceptions.
Comment: In order to insure a contract for sale, several conditions must be met.
Possible Outstanding Contracts
The Company requires satisfactory evidence as to whether there are any outstanding contracts for sale on the land. At that time, the Company may make additional requirements or exceptions.
Comment: You may use this requirement if you suspect there are outstanding contracts for sale: condominium units in a construction loan or project sale; developer lots in an unimproved subdivision; other known circumstances of common contract financing.
Requirement of Seller Consent to Transaction
Terms and provisions of contract for sale between ____________, seller, and ____________ buyer [recorded ____________]. The Company requires the Seller to consent to any transaction by the Buyer and to verify the contract is current and not in default.
Comment: Use this requirement if an insured contract will be mortgaged or assigned. In some circumstances, the Company will insure a mortgage of a contract interest.
Contract Exception - Contract Not Insured
Terms and provisions of the contract for sale between ____________, seller, and ____________, buyer, [recorded ____________]. The Company does not represent the current ownership of this interest.
Comment: Use this exception to an outstanding contract if the Company is not insuring a purchaser.
Contract Exception - Contract Insured
Terms and provisions of the contract for sale between ___________, seller, and _____________, buyer, recorded _____________.
Comment: Use this Schedule B exception when insuring the equitable interest of the buyer to purchase the title to the land under the contract. The contract or a satisfactory memorandum must be signed and acknowledged by the seller in accordance with state law and must be recorded.
Seller's Interest Assigned
The interest of the seller to receive payment under the contract was assigned to ___________ by assignment recorded ____________.
Comment: Add this exception if an insured or excepted contract has been assigned by the seller (in a sale or mortgage of the seller's interest).
Buyer's Interest Assigned
The interest of the buyer under the contract was assigned to ____________, by assignment recorded ____________.
Comment: Add this exception if an insured or excepted contract has been assigned by the buyer.
Possible Outstanding Contracts
Any and all unrecorded contracts for the sale and purchase of the land, or any part of said land, and the rights and interest of any and all parties under such contracts.
Comment: Use this exception if you suspect there are outstanding contracts: e.g., condominium units in a construction loan or project sale; developer lots in an unimproved subdivision; or other known circumstances of common contract financing.
Recharacterization as a Financing Scheme
Any claim that the vesting of title in the insured is part of a loan transaction, or that the deed to the insured and/or the contract for sale referred to in Schedule B constitutes a mortgage or other security device.
Comment: A contract may be part of a financing scheme, particularly if the buyer previously conveyed title to the new seller. In such event, use this exception when insuring the fee owner.
Description of Insured Contract
The equitable interest to purchase title to the land created by that land contract dated ____________ between _________, seller, and _____________, buyer, recorded ___________________.
Comment: Use this description of the contract if the Company insures the buyer's interest.