Condominium Endorsement (ALTA 4 and 4.1): Underwriting Guidelines

In order to insure condominium units, all condominium documents must be read by the title examiner. The examiner should review all condominium documents, master deeds, or individual deeds for the following:


1.  Compliance with all state laws and requirements creating condominium estates for that particular state.

2.  Compliance with state law providing that the unit and common elements may be assessed individually and separately for tax purposes.

3.  The restrictions must be reviewed for any options to purchase, right of first refusal, forfeiture or reversionary provisions. If such provisions are contained in the deed, they must specifically state that they are subordinate to the lien of the insured before the endorsement may be issued; otherwise, paragraph 4 must be deleted from the endorsement. (Reversionary clauses, no matter how to designated {reverted, rights of re-entry, etc.} should be set out verbatim in Schedule B of the commitment or policy.)

4.  Any and all maintenance assessments must be brought current and the assessment lien expressly subordinate to the lien of the insured mortgage; otherwise, paragraph 4 must be deleted.

5.  The state condominium act must be reviewed to verify that it does not provide for superiority of the condominium assessment lien over the insured mortgage.

6.  Verification of compliance and estoppels letter from the condominium association with regard to the right of refusal to purchase the unit and its common elements for this or any prior transaction. Every condominium commitment and policy must contain the following exceptions:


“Limitations and conditions imposed by the condominium law of _____ as set out in [statutory citation]”;

“Terms, provisions, covenants, conditions, easements, rights, options and liens established by and contained in the Master Deed [or Declaration of Condominium] or [Condominium project, of record in [Recording Information].”


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