Endorsements: Form 2100-06 Instructions

NOTES:

Coverage: Similar to the Restrictions, Encroachments and Minerals Endorsement, ALTA 9-06, this endorsement provides coverage to lenders over covenants, conditions and restrictions. Unlike the ALTA 9-06, however, this endorsement does not insure over encroachments or damage resulting from the future exercise of any right to use the surface of the Land for the extraction or development of minerals. This endorsement assures lenders that:

1. the covenants, conditions or restrictions (CCRs) do not extinguish the mortgage or impair it;
2. unless shown on Schedule B, there are no violations of the CCRs;
3. unless shown on Schedule B, there are no encroachments over setback lines;
4. unless shown on Schedule B, the CCRs do not create an easement;
5. unless shown on Schedule B, the CCRs do not create a lien for liquidated damages;
6. unless shown on Schedule B, the CCRs do not provide for a private charge assessment;
7. unless shown on Schedule B, the CCRs do not create an option to purchase, right of first refusal or a prior approval of a future purchaser or occupant;
8. unless shown on Schedule B, there are no recorded notices of a violation of any CCRs related to environmental protection;

Procedure: This endorsement may be issued on Loan Policies only. This endorsement may be issued on either commercial or residential properties. To issue this endorsement, follow the steps below:

1. Carefully review the covenants, conditions or restrictions (CCRs). In particular,
   1. the CCRs should not contain any forfeiture or reversion language; if they do, then you may not issue this endorsement;
   2. if the CCRs provide for an assessment, create a lien for liquidated damages, or create an easement, raise those matters on Schedule B;
   3. if the CCRs contain a right of first refusal, or a lien that may take priority over the mortgage, raise these matters on Schedule B and obtain waivers from those who hold those interests; and
   4. if the CCRs create an option to purchase or a prior approval of a future purchaser or occupant, raise those matters on Schedule B and obtain waivers or approvals from those who hold those interests;
2. Review the subdivision plat to determine easements and building lines, and raise Schedule B exceptions for each.
3. Obtain a current survey or an Affidavit in Lieu of Survey, depending upon the type of property and policy. depending upon the type of property. The member must obtain a current survey for all commercial properties and for residential properties in Cook County and the surrounding counties (DuPage, Kane, Kendall, Lake, McHenry, and Will). ATG will accept an Affidavit in Lieu of Survey for all loan policies issued in a refinance and for residential property in all other Illinois counties. The current survey should clearly show all improvements as well as all easements, setback lines, and other matters affecting the property. Check to see that there are no violations of the CCRs and no encroachments. If there are any such violations or encroachments, raise them as exceptions on Schedule B. Remember that setbacks may be created by the plat, the CCRs or by ordinance. Make sure you raise exceptions for violations of any setbacks requirements, no matter how created.
4. If you have raised any encroachments onto adjoining property, any violations of the CCRs, or any violations of any setback lines, you must determine whether the encroachment or violation falls within our encroachment underwriting guidelines for the loan policy to see whether they may be insured over.

Questions? Contact an Underwriter.