Real Estate Transaction Fundamentals

Title insurance is issued using standardized forms of policies and endorsements. The most commonly used forms for commercial properties are those promulgated by the American Land Title Association (ALTA), a nationwide title insurance industry group. A title endorsement is an addition to or limitation of title insurance coverage that is attached to a title insurance policy. Endorsements provide coverage that tailors the policy to fit the needs of the insured for a specific transaction. There are approximately 80 ALTA-approved endorsement forms from which the insured may select additional coverage. While endorsement forms are standard, requirements for each vary.
In order to ensure adequate coverage, it is important that you are aware of the underwriter’s specific requirements to issue a particular endorsement and that you provide for ample lead time to fulfill these requirements. Your coverage is only as good as your endorsement. Some endorsements require no additional submissions to the underwriter and may be of interest if your timeline and budget permit.

The ALTA Endorsement 3-06, Zoning Unimproved Land, is designed for vacant land. It provides insurance against loss or damage sustained due to the failure of the land to hold a particular zoning classification and against certain specified uses not being permitted under the zoning ordinance(s) in effect. Underwriting requirements may include the following: review of the zoning maps and ordinances, zoning report, zoning compliance letter, attorney’s opinion or owner’s affidavit with respect to current use and no knowledge of violations.