Commonwealth Land Title Insurance Company, NCS

ALTA ENDORSEMENTS - 28 - SAMPLES AND DESCRIPTIONS PLANNED UNIT DEVELOPMENT – ASSESSMENTS PRIORITY – FORM 5-06 ALTA Endorsement — Form 5-06 is available only for loan policies. While designed for policies on individual residences located in planned unit developments, it may be considered in any situation in which a homeowners association or other type of master agreement has been recorded. This endorsement details four matters over which insurance is being provided. Specifically, the endorsement: • provides coverage against loss caused by a present violation of certain restrictions; • insures against loss arising from lack of priority of the Insured Mortgage lien over the lien for homeowners’ association assessments; including possible future assessments; • covers losses due to the enforced removal of an existing structure because of an encroachment; and • covers losses from the failure of title caused by the exercise of any right of first refusal. Some of these matters would be covered by the standard loan policy without any endorsement. Nevertheless, the endorsement states each such coverage affirmatively. This endorsement may be issued only after the relevant aspects of the development in which the property is located have been reviewed. Of particular import is the necessity of obtaining satisfactory evidence that there are no unpaid liens for any homeowners’ charges or assessments and that any right of first refusal which could have been exercised at date of policy has been duly waived. If, after reviewing the relevant documentation, it is determined that one or more of the coverages may not be provided, it may be possible in some jurisdictions to issue a modified version of this endorsement which deletes those unavailable coverages. ALTA Endorsement — Form 5-06 (Planned Unit Development – Assessments Priority – 2/3/10) Form 5-06 Planned Unit Development – Assessments Priority