Title Law Annotated

Title Law Associates™

TITLE INSURANCE UNDERWRITING
PRINCIPLES AND EXCEPTION LANGUAGE
ORIGINAL PRINTING

NB: To view the revised 6th edition TITLE INSURANCE UNDERWRITING AND EXCEPTION LANGUAGE dated 4/1/02, Click this link.

ACCESS
1.ACCESS INSURED
2.PLAT DEDICATION
3.ACCESS TO NAMED STREET
4.ACCESS VIA PRIVATE EASEMENT

ACCOMMODATION RECORDINGS

ADVERSE POSSESSION
1.ACQUISITION OF TITLE
2.COLOR OF TITLE
3ADVERSE POSSESSION WITHOUT JUDICIAL DETERMINATION GENERALLY NOT INSURABLE
4.SPECIAL CIRCUMSTANCES: REQUIREMENTS
5.GOVERNMENTAL ENTITIES

AFFIRMATIVE COVERAGE(S) - PROVISIONS FOR - REQUIREMENTS
See also: Demands For Affirmative Coverage - Guidelines

ANTECEDENT DEBT TRANSACTIONS

APPEALS

ASSET SWAPS

BALLOON MORTGAGE PROGRAM

BANKRUPTCY - GENERAL
1.PRIOR TO OCTOBER 1, 1979
2.AFTER OCTOBER 1, 1979
3.REMOVAL OF PROPERTY FROM BANKRUPTCY ESTATE
4.AUTOMATIC STAY
5.EXEMPT PROPERTY
6.ABANDONED PROPERTY
7.SALES BY TRUSTEES AND DEBTORS IN POSSESSION
8.GENERALLY
9.TITLE
10.PRIOR JUDGMENTS AND LIENS
11.CONVEYANCE BY LENDER OF REAL ESTATE OWNED IN CONSIDERATION OF PARTIAL OR TOTAL EXTINGUISHMENT BY GRANTEE OF ANTECEDENT DEBT OWING TO SUCH GRANTEE
12.CURRENT TRANSACTIONS
13.SALE OF PROPERTY IN THE ORDINARY COURSE OF BUSINESS (11 USC 363)
14.SALE OF PROPERTY NOT IN ORDINARY COURSE OF BUSINESS
15.APPEALS
16.DISCHARGE OF DEBTOR

BANKRUPTCY AND CREDITORS RIGHTS ISSUES FOR THE UNDERWRITER
1.THE BANKRUPTCY ESTATE
2.EXEMPT PROPERTY
3.ABANDONED PROPERTY
4.NOTICE PROVISIONS
5.TRUSTEES AVOIDANCE POWERS
6.LEVERAGED BUY-OUT
7.UPSTREAM, DOWNSTREAM AND CROSS-STREAM TRANSACTIONS
(See also Intercorporate Guarantees)
8.LOAN POLICY - EXCLUSIONS FROM COVERAGE
9.OWNER'S POLICY - EXCLUSIONS FROM COVERAGE
10.NEW YORK CREDITORS' RIGHT EXCLUSION [OWNERS POLICY & LOAN POLICY]
11.SELLER IN BANKRUPTCY
12.EFFECT OF BANKRUPTCY ON JUDGMENT LIENS

BANKRUPTCY - SPECIFIC TOPICS - APPEARING IN ALPHABETICAL ORDER
1.ABANDONED PROPERTY - LEGAL
a)actual abandonment [11 USC 544 (a)]
b)constructive abandonment [11 USC 544 (c)]
c)title rule
2.ABANDONED PROPERTY - TITLE GUIDELINES
3.AUTOMATIC STAY - RELIEF FROM
4.DISCHARGE IN BANKRUPTCY
a)non-dischargeable debts
b)effect of discharge
c)property acquired after discharge - affect upon pre-petition judgments
5.DISCHARGE - AFFECT UPON PRE-PETITION DOCKETED JUDGMENTS
6.EXAMINATION REQUIREMENTS
7.FINANCING THE DEBTOR IN POSSESSION
8.FRAUDULENT TRANSFERS AND OBLIGATIONS
a)fraudulent transfers (11 USC 548)
b)preferences (11 USC 547)
9.SALES FREE AND CLEAR - COURT ORDER REQUIRED
10.SALES FREE AND CLEAR OF LIENS, TAXES AND TRANSFER TAXES - SUGGESTED FORM OF ORDERS
11.TITLE REQUIREMENTS AND CHAPTER RELATED ISSUES

BEACH RIGHTS
(See Also: Water and Water Courses)
1.RIGHTS OF THE PUBLIC
2.RIPARIAN RIGHTS

CASH TRANSACTIONS

CEMETERIES
1.UNINSURABLE
2.EXCEPTION NECESSARY

CLEARING LIENS AND ENCUMBRANCES - MISUSE OF INDEMNIFICATION

CLEARING TITLE REQUIREMENTS AND DISPOSING OF TITLE OBJECTIONS
1.IN GENERAL
2.TITLE STANDARDS
3.ABSENT SELLERS
4.PAYMENT OF CONSIDERATION
5.NATIONAL BANKS - RESTRICTIONS UPON PROPERTY OWNERSHIP
6.MORTGAGES
7.MORTGAGES AND OTHER LIENS
8.MORTGAGES - ACCOMMODATION MORTGAGES
9.MORTGAGES - AFTER ACQUIRED PROPERTY CLAUSE
10.MORTGAGES -ASSIGNMENTS OF MORTGAGES
11.MORTGAGES - PARTICIPATION AGREEMENTS
12.MORTGAGES - PARITY CLAUSE
13.MORTGAGES - PARI PASSU
14.MORTGAGES - SPREADER AGREEMENT
15.MORTGAGE SUBORDINATED
16.LEASES - MEMORANDA OF
17.LEASES - MEMORANDA - SURRENDER OF
18.LEASES - TENANTS RIGHTS OF NON-DISTURBANCE
19.LEASES - POSSIBLE USE RESTRICTIONS - LANDLORDS OBJECTION
20.ASSIGNMENTS OF RENTS AND LEASES
21.INVESTMENT INCOME PROPERTY
22.LEASEHOLD MORTGAGE WHERE THE FEE MORTGAGE IS TO BE SUBORDINATED
23.LEASEHOLD MORTGAGE WITH FEE TITLE TO BE SUBORDINATED- WAIVER OF DEFENSES
24.JUDGMENTS
25.JUDGMENTS - PERSONS OF SIMILAR NAME - AFFIDAVITS
26.JUDGMENT IN FACT AGAINST SELLER
27.SUBROGATION AGREEMENT
28.EASEMENTS
29.OBVIOUS EASEMENTS
30.UNLOCATED EASEMENTS
31.DRAINAGE DITCHES
32.VIOLATION OF ZONING AND BUILDING ORDINANCES
33.TAXES
34.ENVIRONMENTAL CONTROLS
35.CONCESSIONS AND LICENSES
36.ADVERTISING LEASES
37.MINERAL RIGHTS WATER RIGHTS
38.NATURAL RIGHTS
39.RIGHTS OF RIPARIAN OWNERS IN STREAMS
40.TIDAL WATERS
41.PERMITS
42.RIGHTS OF PUBLIC IN HIGHWAYS THAT CROSS PROPERTY
43.ENCROACHMENTS ON EASEMENTS
44.ENCROACHMENTS UPON PUBLIC WAYS ABOVE & BELOW GROUND
45.ENCROACHMENT OF IMPROVEMENTS UPON ADJOINING LAND
46.VIOLATIONS OF FEDERAL OR STATE LAWS OR REGULATIONS
47.MAPS OF FUTURE STREET
48.VIOLATION OF ACTS RELATING TO SUBDIVISION APPROVAL
49.LACK OF ACCESS
50.INSURED OTHER THAN OWNER
51.FAILURE TO COMPLY WITH LAWS RELATING TO RECORDING
52.RESTRICTIONS
53.RESTRICTIONS AND VIOLATIONS OF RESTRICTIONS
54.COVENANTS
55.CONDITIONS
56.DEEDS BY MINORS
57.TRANSACTION BY FIDUCIARIES TO THEMSELVES INDIVIDUALLY
58.POWER OF ATTORNEY
59.DEATH OF JOINT TENANT OR TENANT BY THE ENTIRETY
60.DEATH OF SOLE OWNER OR TENANT IN COMMON
61.SMALL ESTATES - NO PROBATE
62.PROBATED ESTATE - SALE BY EXECUTOR UNDER POWER OF SALE
63.SALE BY PERSONAL REPRESENTATIVE BY COURT PROCEEDINGS
64.ESTATE TAXES
65.AFFIDAVITS OF HEIRSHIP
66.FORFEITURE OF INSTALLMENT SALES CONTRACTS
67.CLEARING MECHANIC'S LIENS - IN GENERAL
68.CLEARING MECHANIC'S LIENS - BIG LOANS
69.SURVEY CONSIDERATIONS AND REQUIREMENTS
70.EXECUTION OF CLOSING INSTRUMENTS BY A BLIND PERSON
71.DEEDS OF CONVEYANCE - SUFFICIENCY
72.MARITAL STATUS OF GRANTORS
73.REPRESENTATIVE CAPACITY OF GRANTOR
74.CORPORATE RESOLUTIONS
75.CORPORATE DISSOLUTION AND LIQUIDATION
76.MUNICIPAL CORPORATION AS PARTY
77.PARTNERSHIP AS GRANTOR
78.PARTNERSHIP PROPERTY - FEDERAL LIENS
79.IDENTITY OF GRANTOR
80.DEATH OF FORMER CO-GRANTEE
81.FORM AND COMPLETENESS OF GRANT
82.CONSIDERATION PASSED AND DELIVERY MADE
83.TENDER OF TITLE
84.DESCRIPTION
85.EXECUTION
86.ACKNOWLEDGMENT
87.ENCUMBRANCES TO BE REMOVED
88.MAJOR AREAS OF TITLE RISK
89.CLEARING TITLE
90.DISPOSING OF TITLE OBJECTIONS

COLLATERAL LOANS - INSURANCE OF
refer to Insuring Collateral Loans

COLLEGES AND UNIVERSITIES
1.HIGHER EDUCATION FACILITIES ACT

COMPREHENSIVE ENDORSEMENT(S)
(See Also: Endorsements)

CONDEMNATION
(See Also: Eminent Domain)

CONDOMINIUM
1.COMPLIANCE WITH STATUTORY LAW
2.COMMON ELEMENTS
3.PHASE DEVELOPMENT
4.CONVERSION
5.DECLARATION OF CONDOMINIUM
6.EXCLUSIVE USE AND APPURTENANCES: PARKING SPACES
7.CABANAS, GARAGES AND BOAT SLIPS
8.SURVEY
9.AFFIRMATIVE COVERAGE AS TO VALIDITY
10.CONDOMINIUM ENDORSEMENTS
11.TIME SHARING/INTERNAL OWNERSHIP (also indexed separately)

CONSTRUCTION LOANS - ASSUMPTION OF MECHANICS LIEN RISK - LOSS OF
PRIORITY - CREDIT CONTROLS

1.INTRODUCTION
2.TITLE RULE
3.EXPLANATION
4.WHEN RISK IS PERMISSIBLE - UNDERWRITING REQUIREMENTS
5.PRELIMINARY QUESTIONS AND CONSIDERATIONS
6.CONDOMINIUM SITUATIONS
7.RELIANCE UPON INDEMNITIES ALONE - SPECIAL CONDITIONS - REQUIREMENTS
8.FINANCIAL STATEMENT REVIEWS - RATIOS
9.QUICK ANALYSIS RATIO
10.ADDITIONAL CRITERIA
11.SAMPLE BALANCE SHEET
12.RATIO ANALYSIS

(see Also: Mechanics' Liens; Mechanics' and Materialmens' Liens;
Company Policy relating to Insuring Over; Bonding Over
Recorded Mechanics' Lien Claims; Pa. Construction Loan
Mortgages.

CONTRACT FOR DEED
1.RECORDATION AND INTEREST INSURED
2GENERAL EXCEPTIONS
3.UNRECORDED CONTRACT (AGREEMENT) FOR DEED

COOPERATIVE APARTMENT UNITS
1.GENERALLY
2.REQUIREMENTS
3.PRIOR APPROVAL REQUIRED

CORPORATIONS
1.CORPORATE EXISTENCE
2.EXISTENCE AND AUTHORITY
3.FOREIGN CORPORATIONS
4.CORPORATE TAXES
5.ALL OR MAJOR PORTION OF CORPORATE ASSETS
6.DISSOLUTION
7.MISNOMER
8.CORPORATION NOT IN EXISTENCE
9.PROFESSIONAL CORPORATIONS
10.NON-PROFIT CORPORATIONS
11.CORPORATE SOLE
12.OTHER RELIGIOUS ORGANIZATIONS
13.CONVEYANCE BY CORPORATION TO ONE OR MORE OF ITS OFFICERS
14.SALE OF STOCK
(See Also: Stock Transfers and Insuring Stock Transfers)

CORPORATE BULK SALES TAX CLEARANCE [Pa.]

CREDITORS' RIGHTS

CREDITORS' RIGHTS ISSUES AFFECTING TITLE INSURANCE
1.INTRODUCTION
2.FRAUDULENT CONVEYANCE ISSUES
a)Leveraged Buy-out
b)Sheriff Sales, "Durrett" and the 70% Rule
c)Deeds in Lieu of Foreclosure
d)Parcel Assemblage - The Lease
e)Grantors Options to Purchase
f)Contract for Sale - Vendee in Possession
g)Transactions between General Partner and Partnership Transactions
h)Corporate Guarantee Transactions
i)Mortgages Option to Purchase
j)Mortgage to Secure Antecedent Debt

CREDIT RISK CONTROL PROGRAM
See also: Indemnity Practice and Procedure

COURTESY RECORDING INSTRUCTIONS

DECEDENTS' ESTATES - DEFINITIONS

DECEDENTS' ESTATES
1.GENERALLY
2.PRESUMPTION OF DEATH
3.CREDITORS
a)Title Acquired from Estate
b)Title Acquired from Heirs or Specific Devisee
c)Exception to be Made
d)Exemptions
4.ESTATE OR INHERITANCE TAXES
a)Life of Lien
b)Homestead Property
c)Divestment on Entireties or Survivorship Property
d)Divestment by Necessary Sale
e)Small Estates
f)Exception for Taxes
5.DETERMINATION OF HEIRS OR DEVISEES
a)Homestead, Elective Shares and Dower Rights
b)Administered Estates
c)Unadministered Estates
d)Affidavit of Heirship
6.COMMUNITY PROPERTY
7.AGREEMENT AMONG HEIRS OR DISTRIBUTEES
8.FOREIGN ADMINISTRATION (OUT OF STATE OR COUNTRY)
9.MORE THAN ONE PERSONAL REPRESENTATIVE
10.LIFE ESTATES
11.JUDGMENTS AGAINST HEIRS
12.EXAMINATION OF PROBATE PROCEEDINGS

DECEDENTS' ESTATES DISCUSSION - PA. SUPPLEMENT

DEED IN LIEU OF FORECLOSURE
(See Also: Creditors' Rights for Policy Distinction)

1.LANGUAGE FOR ABSOLUTE CONVEYANCE
2.MERGER
3.CREDITORS' RIGHTS: BANKRUPTCY
4.EXCEPTION NECESSARY
5.REQUIREMENTS FOR WAIVER
6.PURCHASER FROM MORTGAGEE-GRANTEE
7.MORTGAGEE-GRANTEE: FAIR MARKET VALUE; REASONABLY EQUIVALENT VALUE
8.PRIOR APPROVAL NECESSARY TO DELETE EXCEPTION
9.ALL OTHER EXISTING ENCUMBRANCES SURVIVE

DEEDS IN LIEU
[a] The Legal Issue
[b] The Form of Exception
[c] The Clearance requirements of the company

EXHIBIT A - DEED RECITAL
EXHIBIT B-l - ESTOPPEL AFFIDAVIT FROM INDIVIDUAL
EXHIBIT B-2 - ESTOPPEL AFFIDAVIT FROM HUSBAND & WIFE
EXHIBIT C - ESTOPPEL AFFIDAVIT FROM CORPORATION

DEFECTIVE TITLES
1.DEFECTS NOT TO BE INSURED
2.MARKETABILITY CONCERNS

DESCRIPTIONS
1.GENERALLY
2.AMBIGUITY OR ERROR
3.AREA AND CONTENT NOT TO BE INSURED

THE DIVORCE CODE, EQUITABLE DISTRIBUTION AND REAL ESTATE SETTLEMENTS

DOING BUSINESS LAWS

EASEMENTS AND RIGHTS OF WAY
1.EASEMENTS MUST BE EXCEPTED
2.SAMPLE EXCEPTIONS
3.RAILROAD SWITCH OR SPUR TRACKS
4.EXCEPTION FOR EASEMENT
5.ENCROACHMENTS UPON EASEMENTS
6.VACATION OF STREET OR ALLEY
7.INSURING APPURTENANT EASEMENTS
8.EASEMENTS NOT OF RECORD
9.PRESCRIPTIVE EASEMENTS
10.LICENSES
11.TERMINATION AND EXTINGUISHMENT

ENCROACHMENTS
1.EXCEPTION REQUIRED
2.AFFIRMATIVE COVERAGE
3.SUGGESTED LANGUAGE AND EXCEPTIONS
4.SUGGESTED LANGUAGE: AFFIRMATIVE COVERAGE

ENDORSEMENTS
1.USE OF ENDORSEMENTS
2.STANDARD ENDORSEMENTS
3.SURVEY, EASEMENTS, ENCROACHMENTS, ETC.
4.ZONING, USURY, NON-IMPUTATION, MECHANICS' LIENS, ETC.
5.ENDORSEMENT FORM
6.SAMPLE LANGUAGE

ENDORSEMENT FORMS AND INSTRUCTIONS
1.ALTA FORMS
2.CLTA FORMS
3.PLTA FORMS
4.TIRSA
5.SPECIAL COMMERCIAL ENDORSEMENT FORMS

See also: Instructions as to the Use of Title Insurance Endorsements

ENVIRONMENTAL PROTECTION LIENS
1.POLICIES EXCLUDE COVERAGE FOR UNRECORDED LIENS
2.RECORDED LIENS
3.AFFIRMATIVE COVERAGE ON RESIDENTIAL LOAN POLICIES
4.SUPER LIENS
5.EXEMPTIONS; STATE SUPER LIENS; ALTA 8.1 ENDORSEMENTS
6.ALTA 8.1 FOR RESIDENTIAL PROPERTY ONLY

ENVIRONMENTAL LIEN SEARCHING IN U.S. DISTRICT COURT

EQUITY PARTICIPATION
(See Also: Shared Appreciation Mortgages)

EQUITY SECURITIZATION
(See also: REIT's and Securitization

EQUITABLE SUBORDINATION

EQUITABLE SUBROGATION - DOCTRINE OF - In re: Atrium II Limited Partnership

ESCROWS - USE OF WHEN INSURING OVER SPECIAL EXCEPTIONS -

SAMPLE FORMS OF LANGUAGE
(See Also: Affirmative Coverage; Clearing Liens
and Encumbrances; Mechanics Liens - Loss of Priority - Credit Controls;

ESCROWS - STANDARD ADDENDUM WHEN USING FORM NOT PREPARED BY COMPANY

EXTENDED COVERAGE - COMPARED TO STANDARD COVERAGE

FEDERAL DEBT COLLECTION PROCEDURES ACT

FILLED-IN-LAND
(See Also: Water and Water Courses)

1.GOVERNMENTAL SOVEREIGNTY RIGHTS
2.REQUIRE DEED FROM SOVEREIGN
3.NAVIGABLE SERVITUDE
4.SUBMERGED LANDS NOT TO BE INSURED

FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT (FIRPTA)

FORFEITURES UNDER RICO AND OTHER CRIMINAL STATUTES
1.PROPERTY MAY BE FORFEITED
2.FEDERAL ACTS
3.KNOWLEDGE OF CRIMINAL ACTIVITY
4.FEDERAL FORFEITURE PROCEEDINGS: CHARACTERIZATION; VENUE
5.PROCEDURES: NOTICE
6.DETERMINATION OF INTERESTED PARTIES
7.STATE FOR FORFEITURE PROCEEDINGS
8.REGIONAL OFFICE AUTHORITY REQUIRED
9.PRIOR COMMITMENT
10.TITLE OBTAINED BY DEED FROM CONVICTED FELON
11.COMPANY POLICY
(See Also: Underwriting Judicial Forfeiture -extra hazardous risk)

GUARDIANS

GUARDIANSHIP

GUARDIANSHIPS, POWERS OR ATTORNEY & UNIFORM GIFTS TO MINORS ACT - PA SUPPLEMENT

UNDERWRITING JUDICIAL FORFEITURE
1.INTRODUCTION
2.POLICY INSURING CLAUSES
3.PROCEEDINGS ARE IN REM
4.UNDERWRITING REQUIREMENTS AND CONSIDERATIONS
a)civil forfeiture
b)criminal forfeiture
5.DOCUMENTS TO BE RETAINED IN THE TITLE FILE
6.TITLE OBTAINED FROM A CONVICTED FELON
7.THE CRUEL AND UNUSUAL PUNISHMENT ARGUMENT
8.APPEAL OF STATE FORFEITURE STATUTES TO THE U.S. SUPREME COURT
9.CONCLUSION - WARNING - THESE TITLES REPRESENT AN EXTRA HAZARDOUS RISK

NB HOME OFFICE APPROVAL IS REQUIRED IN ALL CASES

FORGERIES
1.RED FLAGS
2.DETERMINATION OF FORGERY
3.REDUCTION OF RISK

FRACTIONAL INTEREST
1.FRACTIONAL INTERESTS MAY BE INSURED
2.INSURANCE AMOUNT; DESCRIPTION OF INTEREST

FRAUDULENT TRANSFERS AND CREDITORS' RIGHTS - TITLE INSURANCE CONSIDERATIONS

FRAUDULENT TRANSFER LAWS - BADGES OF FRAUD - CITATIONS

Reprinted from ASSET PROTECTION with permission

GUARANTEES
1.INTER-CORPORATE GUARANTEES AS FRAUDULENT TRANSACTION
2.INTER-CORPORATE GUARANTEES - DOWNSTREAM TRANSACTIONS VOIDABLE

HOSPITALS AND NURSING HOMES
1.HILL-BURTON ACT
2.OTHER STATE OR FEDERAL LEGISLATION OR REGULATION

HUD - 1: REPORTING CHANGES

IMPUTATION OF KNOWLEDGE - PARTNERSHIPS

INDEMNITIES AND UNDERTAKING - DIFFERENCES AND PROCEDURES
1.THE PERSONAL UNDERTAKING
2.THE BOND OF INDEMNITY
3.AGREEMENT WITH DEPOSIT TO PROTECT AGAINST TITLE DEFECTS
4.NS VOIDABLE - LENDER LIABILITY

INVOLUNTARY TRANSFERS OF TITLE

1.TAX SALES

A. MUNICIPAL TAXES
B. REAL ESTATE TAX SALE LAW

2.SHERIFF'S SALES

A. MORTGAGE FORECLOSURES
B. MUNICIPAL LIEN SALES

3.MARSHALL'S SALES
4.BANKRUPTCY

JOINT VENTURE
1.JOINT VENTURE AS ENTITY
2.PARTNERSHIP
3.NAME SEARCH

LEASES AND LEASEHOLD ESTATES
(See Also: Sale - Lease Back)
1.POSSESSION AND UNRECORDED LEASES
2.RECORDED LEASES
3.UNRECORDED LEASES
4.INSURING THE LEASEHOLD
5.TITLE INSURANCE LEASE ISSUES
LEASES - MEMORANDA OF
LEASES - MEMORANDUM - SURRENDER OF
LEASES - TENANTS RIGHT OF NON-DISTURBANCE
LEASES - POSSIBLE USE RESTRICTIONS - OPPOSITION
LEASES - ASSIGNMENTS OF RENTS AND LEASES
6. OPTIONS CONTAINED IN LEASES - TITLE ISSUE
FORM OF SUGGESTED COVERAGE

LETTER OF CREDIT

LETTERS OF INDEMNITY

LETTERS OF INDEMNITY BETWEEN TITLE COMPANIES
FORM OF INDEMNITY REQUEST

LEVERAGED BUY-OUTS
(See Also: Creditors' Rights Issues)

1.GENERALLY
2.IMPACT
3.CONCERNS: BANKRUPTCY, CREDITORS' RIGHTS
4.CHANGE OF TITLE NOT NECESSARY
5.EXCEPTION NECESSARY
6.COMPANY POLICY: PRIOR APPROVAL REQUIRED

LIMITED LIABILITY COMPANIES
1.INTRODUCTION
2.TAXATION OF
3.ENABLING LEGISLATION
4.TITLE ISSUES RELATED TO LLC
5.TITLE UNDERWRITING GUIDELINES

MANUFACTURED HOUSING/MOBILE HOMES
1.ALL MANUFACTURED UNITS
2.MOBILE HOMES
6.CONSTRUCTION MORTGAGE GUIDELINES - PENDING DISBURSEMENT CLAUSE(S)

MECHANICS LIEN WAIVERS IN PENNSYLVANIA

MECHANICS LIENS
-PA. CONSTRUCTION LOAN MORTGAGES
I. Financing for Improvements not yet commenced
II. Out-sale Situations - Improvements completed - Lien period unexpired
III. Improvements Commenced Prior to Mortgage Closing - Excavation
IV. Owner acting as his own General Contractor
V. Conclusion
VI. Pending Disbursement Clause

MECHANICS' AND MATERIALMENS' LIENS
1.GENERAL GUIDELINES IN LOSS OF PRIORITY SITUATIONS
2.INSPECTIONS
3.LOSS OF PRIORITIES IN EXCESS OF AUTHORIZED LIAIBILITY AMOUNT
4.AFTER RECORDING [OF] CONSTRUCTION LOAN

COMPANY POLICY RELATING TO INSURING A MORTGAGEE AGAINST MECHANICS LIENS DURING CONSTRUCTION

BONDING OVER RECORDED MECHANICS' LIEN CLAIMS

1.DIRECT OBLIGATION Vs. GUARANTEE
2.CONTRACTOR'S BONDS
3.PERFORMANCE BOND
4.PAYMENT BOND
5.PROFESSOR KRATOVILS SUGGESTION
6.FAILURE TO PAY SUBCONTRACTORS - TITLE RISK
7.RELIANCE UPON PAYMENT AND PERFORMANCE BONDS - TITLE RISK
8.DUAL OBLIGEE BOND - LOS ANGELES CLAUSE
9.ADVENT OF COMPLETION BOND
10.LARGE COMMERCIAL CONSTRUCTION
11.TITLE RULE
12.CAVEAT

MINERAL RIGHTS
1.TITLE RULE
2.SPECIAL COAL AND SUPPORT LEGISLATION IN PA.
3.REVERSION OF COAL TO REAL ESTATE UPON EXPIRATION OF LEASE
4.FORM OF TITLE EXCEPTION
5.INSURING TITLE TO MINERAL RIGHTS
6.REQUESTS FOR EXTENDED COVERAGE
7.PRELIMINARY INVESTIGATIVE PROCEDURES
8.INSURANCE AGAINST EXERCISE AND SUBSIDENCE - GENERAL RULE
9.FORM OF EXTENDED COVERAGE

MINERAL RIGHTS - PENNSYLVANIA GUIDELINES - COAL CLAUSE
1.COAL CLAUSE IN PA.
2.ALTERNATIVE WHEN COVERAGE UNAVAILABLE IN PA. - CONTACT BUREAU OF MINES

MINERAL RESERVATIONS
1.EXCEPTIONS: LAND SUBJECT TO MINERAL RIGHTS
2.AFFIRMATIVE ASSURANCES

MORTGAGES
1.SIMULTANEOUS ISSUE
2.INSURING SIMULTANEOUS MORTGAGES
3.ASSIGNMENT OF MORTGAGE
4.FINANCING STATEMENTS AND ASSIGNMENT OF LEASES/RENTALS
5.ASSIGNMENT OF MORTGAGE PREVIOUSLY INSURED
6.CONSTRUCTION MORTGAGE
7.FUTURE ADVANCE - OPEN-END MORTGAGES
8.ALLOCATION OF PORTION OF LOAN AMOUNT
9.EXISTING MORTGAGE BALANCE
10.ADD ON INTEREST
11.MORTGAGEE ALSO PARTNER IN OWNERSHIP
12.WRAP-AROUND MORTGAGE
13.REGULATORY AGREEMENTS
14.MORTGAGE RELEASE OR PAY-OFF
15.VARIABLE RATE MORTGAGES
16.REVOLVING CREDIT MORTGAGES
17.MORTGAGES GIVEN BY PARTIES NOT RECEIVING THE LOAN PROCEEDS
18.FORECLOSURE OF MORTGAGES
19.CREDITORS' RIGHTS
20.WAIVER OF EXCLUSION: RESIDENTIAL PROPERTY
21.SUCCESSFUL BIDDER AS PROPOSED INSURED: DETERMINATION OF REASONABLY EQUIVALENT VALUE
22.FAIR MARKET VALUE DETERMINATION
23.PURCHASER FROM SUCCESSFUL BIDDER: RESIDENTIAL PROPERTY
24.PRIOR APPROVAL NECESSARY TO DELETE CREDITORS' RIGHTS EXCEPTION

MORTGAGES - REVERSE ANNUITY
See also: Reverse Annuity Mortgages

MORTGAGE MODIFICATION AGREEMENTS (CREDITORS' RIGHTS RISK)
See also: Workouts

MORTGAGE MODIFICATION
1.SAMPLE FORM OF ENDORSEMENT AND INSTRUCTIONS PREREQUISITE TO ISSUANCE

NON-IMPUTATION ENDORSEMENT (SUBSTITUTION of PARTNERS)

NON-RESIDENT INHERITANCE TAX RETURNS

OIL AND GAS LEASES - INSURING OVER

OPTIONS TO PURCHASE
1.INTRODUCTION
2.EXCEPTIONS FOR
3.INSURANCE OF
4.CLOGGING THE EQUITY OF REDEMPTION

ORDINANCES
1.EXCEPTION NEEDED

OWNER'S POLICY
1.FULL INSURABLE VALUE
2.VALUE OF IMPROVEMENTS
3.EXCEPTIONS FOR MORTGAGES

OWNER'S WHO ARE NOT PURCHASERS FOR VALUE
1.TITLE ACQUIRED BY DEED OF GIFT
2.PROPERTY ACQUIRED BY INHERITANCE
3.PROPERTY ACQUIRED BY DEVISE
4.PROPERTY ACQUIRED IN DISSOLUTION OF CORPORATION
5.CONVEYANCE BY A SUBSIDIARY TO A PARENT CORPORATION
6.INUREMENT OF TITLE BY OPERATION OF LAW

PARTIES IN POSSESSION
1.OCCUPANTS
2.TENANTS
3.RECORDED AND UNRECORDED LEASES

PARTNERSHIPS
1.DEFINITION
2.WHO MAY BE PARTNERS
3.TYPES OF PARTNERSHIPS
4.BANKRUPTCY - RULES OF TITLE PRACTICE
5.CHANGE OF PARTNERS - REQUEST FOR FAIRWAY ENDORSEMENT

PARTNERSHIP ISSUES
1.NON-IMPUTATION
(See Also: Imputation of Knowledge)
2.SUBSTITUTION OF PARTNERS - WITHDRAWAL AND SUBSTITUTION
3.REQUIREMENT OF CONSENT TO WITHDRAWAL AND SUBSTITUTION OF PARTY
4.INSURING INCOMING PARTNER - POLICY INSTRUCTIONS
5.FAIRWAY ENDORSEMENT

PARTYWALLS
1.DEFINITION
2.EXCEPTION LANGUAGE: NO INSURANCE PROVIDED
3.EXCEPTION LANGUAGE: INSURED'S USE IMPLIEDLY INSURED
4.LOCATION OF PARTY WALL, GARAGES, ETC.

PENNSYLVANIA CONSTRUCTION LOANS - ACT 126

PERSONAL PROPERTY
1.GENERALLY NOT INSURABLE
2."PERSONAL" PROPERTY CONSTITUTING REAL PROPERTY: FIXTURES
3.IMPROVEMENTS: BUILDINGS "SEVERED" FROM THE REALTY

PERSONS UNDER DISABILITY

PLANNED UNIT DEVELOPMENTS

POLICY FORMS - COVERAGE COMPARISON BETWEEN VARIOUS ALTA POLICIES
DIFFERENCE IN EXCLUSION LANGUAGE

POWER OF ATTORNEY
1.GENERALLY
2.REQUIREMENTS
3.EVIDENCE OF VALIDITY
4.EXECUTION OF DOCUMENTS UNDER POWER OF ATTORNEY
5.RECORDING OF POWER OF ATTORNEY
6.POWERS GIVEN BY TRUSTEES AND PERSONAL REPRESENTATIVES
7.POWERS GIVEN BY PARTNERSHIPS
8.POWERS OF ATTORNEY TO PARTNERSHIPS
9POWERS OF ATTORNEY TO CORPORATIONS
10.POWERS OF ATTORNEY FROM CORPORATIONS
11.CAVEAT - ALL POWERS

REAL ESTATE INVESTMENT TRUSTS

RECHARACTERIZATION

RECORD TITLE
1.COMPANY POLICY
2.ESCROWS

REITS: (See also Equity Securitization and Insuring Securitized Loans)

RESTRICTIONS
1.EXCEPTION FOR RESTRICTIONS
2.VIOLATION OF RESTRICTIONS: REVERTERS
3.INSURING AS TO VIOLATIONS
4.RACIAL RESTRICTIONS
5.ASSESSMENTS CONTAINED IN RESTRICTIONS
6.RESTRICTIONS OF USE

REVERSE ANNUITY MORTGAGES
(See also: Mortgages)

1.GENERALLY
2.SPLIT EQUITY REVERSE ANNUITY MORTGAGE
3.FIXED DEBT RESERVE ANNUITY MORTGAGE
4.RISING DEBT REVERSE ANNUITY MORTGAGE
5.REGULATORY PROBLEMS
6.TRUTH IN LENDING
7.TITLE RELATED PROBLEMS
8.FEDERAL SAVINGS AND LOAN ASSOCIATION
9.THE HECM PROGRAM
10.TITLE CONSIDERATIONS
11.SETTLEMENT PROCEDURES AND CLOSING CHECKLIST FOR HECM LOANS
12.SPECIAL EXCEPTIONS
13.FORM OF AFFIDAVIT TO BE USED

RIPARIAN RIGHTS
(See Also: Water and Water Courses)

1.NOT TO BE INSURED
2.EXCEPTION NECESSARY

RISK PRESENTATION PROCEDURE

SALE-LEASEBACK
1.FEE AND LEASEHOLD INTERESTS MAY BE INSURED
2.NATURE OF TRANSACTION: POSSIBLE SECURITY DEVICE
3.RED FLAGS
4.EVIDENCE TO BE OBTAINED
5.EXCEPTIONS TO BE MADE

SECURITIZATION
See also: REIT and Equity Securitization

SETTLEMENT SERVICES

l.INTRODUCTION
2.FUNDS RECEIVED AND DEPOSITED
3.TITLE INSURANCE CONCERNS - INSTRUCTIONS SHOULD NOT REQUIRE p>

SHARED APPRECIATION MORTGAGES
(See Also: Equity Participation)

STOCKHOLDER PURCHASES
1.GENERALLY
2.THE EXCEPTION
3.PAYMENT OF LOSS DESIGNATION

STOCK TRANSFERS - INSURANCE OF
refer to Insuring Corporate Stockholders

STRAW PARTIES
1.AUTHORIZATION
2.JOINDER OF SPOUSE
3.LIEN SEARCHES
4.EXCEPTIONS
5.JUDGMENTS AGAINST BENEFICIARIES

SUBORDINATIONS

SUBORDINATION AGREEMENTS
1.AUTOMATIC SUBORDINATIONS
2.AGREEMENT FOR FUTURE SUBORDINATION
3.SPECIFIC SUBORDINATION AGREEMENT

SUPERSEDEAS BONDS

SURVEY
1.EXCEPTION FOR MATTERS OF SURVEY
2.REMOVAL OF SURVEY EXCEPTION
3.NON-CURRENT OR INCOMPLETE SURVEY
4.PERIMETER SURVEY
5.RURAL PROPERTY
6.ENCROACHMENTS DISCLOSED BY SURVEY
7.AREA OR CONTENT

TAXES AND ASSESSMENTS
1.EXCEPTION NECESSARY
2.PROOF OF PAYMENT
3.PUBLIC IMPROVEMENTS
4.SEARCH: SPECIAL ASSESSMENTS
5.DRAINAGE DISTRICTS
6.PUD AND CONDO ASSESSMENTS

TAX LIENS
1.TAX LIENS GENERALLY
2.LIEN FOR FEDERAL TAXES
3.RIGHT OF REDEMPTION
4.ESTATE TAXES
5.FEDERAL ESTATE TAXES: RETURN FILING REQUIREMENTS
6.MARITAL DEDUCTION
7.UNIFIED CREDIT
8.NON-PROBATE PROPERTY
9.EXCEPTION TO BE NOTED
10.CAVEAT

TIMESHARING

TIME SHARES
1.INSURING TIME SHARE CONDOMINIUM TITLES
2.OWNERSHIP
3.IDENTITY OF THE NATURE OF THE ESTATE TO BE INSURED
4.TIME-SPAN ESTATE

5.THE INTERVAL ESTATE
6.THE LEASEHOLD ESTATE
7.TITLE INSURANCE ISSUES TO BE ADDRESSED - EXCEPTIONS TO BE TAKEN
8.NON-OWNERSHIP TIMESHARE LICENSES - RIGHT TO USE ONLY
9.TELEMARK CASE AND LATITUDE 24 CLUB CASE

TRUSTS
1.GENERALLY
2.TRUST INSTRUMENT MUST BE EXAMINED AND RECORDED
3."PASSIVE" OR "DRY" TRUSTS
4.TRUSTEES
5.CORPORATE TRUSTEE
6.WHEN TITLE HAS VESTED IN BENEFICIARIES
7.TITLE TO TRUST PROPERTY
8.TRUST NOT TO BE RECORDED
9.TRUST NOT TO BE EXHIBITED
10.BUSINESS TRUSTS: REITS
11."ILLINOIS" LAND TRUSTS
12.TITLE VESTED IN TRUST ONLY
13.POWER OF ATTORNEY GIVEN BY TRUSTEE - RELIANCE UPON

TRUTH IN LENDING
1.GENERAL
2.COVERAGE
3.WHEN THE ENDORSEMENT CAN BE USED
4.FILING AND RATES

UNDERWRITING PHILOSOPHY
refer to The Title Insurance Underwriting Process

USUARY
1.GENERAL
2.COVERAGE OVER USUARY
3.REQUIREMENTS FOR PROVIDING COVERAGE

WATER RIGHTS AND WATER COURSES
1.INTRODUCTION
2.NAVIGABLE WATERS - LAND UNDER AND ALONG
3.RIVERS AND STREAMS
4.FILLED-IN LANDS
5.ARMY CORPS OF ENGINEERS PERMIT
6.AFFIRMATIVE COVERAGE - NAVIGATIONAL SERVITUDE
7.NON-NAVIGABLE WATERS
a)Creeks and streams
b)Lakes and Ponds
c)Canal
d)Drainage Ditches
8.BEACH RIGHTS

WETLANDS

WORK-OUT ARRANGEMENTS
1. DEBT RESTRUCTURING PROBLEMS IN THE WORKOUT OF TROUBLED REAL ESTATE ASSET
a) Mortgage Modification Issue
b) Fraudulent Conveyances Issues
c) Deed-in-lieu of Foreclosure and the issue of Recharaterization
d) Bankruptcy Alternative

ZONING
1.EXCLUSION FOR MATTERS OF ZONING
2.ZONING COVERAGE
3.RECORDED ZONING ORDINANCE

Please choose which principles you require guidelines for and send us an e-mail. We will fax them to your office. Please be sure to include your return address and fax number in the e-mail.

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Power of Attorney | Restrictions | Settlement Services | Subordinations
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Trademarks and Copyright © 1999 (Revision December 2000)
William C. Hart
Title Law Associates™
Phone: 215·379·3195
Fax : 215·379·2214
e-mail:

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