What are the most popular ALTA Endorsements? Read this comprehensive post where we explain the top 10 most popular ALTA Endorsements.

ALTA policies are comprehensive and cover a long list of contingencies that may arise due to encroachment, unrecorded mechanic's liens, assessment, easements, mining claims, and many more. However, the ALTA may not be sufficient to protect the parties in many cases that are not covered by the ALTA title policy. For these cases, the parties in concern need something called ALTA endorsements. 

What are ALTA Endorsements?

ALTA endorsements can be defined as extensions or add ons to the main ALTA title policy to provide insurance cover for special cases. 

In other words, these endorsements allow an insured owner or lender to receive insurance against some specific conditions that are beyond the coverage of the standard policy jacket.

Over the years, ALTA has drafted and put out various endorsements, available for title companies to use. Overall, there are 46 types of ALTA endorsement in use right now that protects the parties from multiple situations. However, some endorsements are more popular than the other ones. In this post, we will look into these endorsements in detail and simplify them for easy interpretation. 

Table of Contents

ALTA 9 Endorsement - Restrictions, Encroachments and Minerals

Also known as form 9 or Florida form 9, this endorsement is by far the most popular amongst other endorsements. ALTA 9 Endorsement allows title companies to issue insurance policies to safeguard the lender against loss or damage resulting from violations of the deed restrictions, encroachments, and set back lines existing as of the date of the policy. 

If you want to learn more about form 9, you can go through one of our previous posts.

ALTA 8.1 Endorsement - Environmental Lines

ALTA 8.1-06 endorsement provides coverage against loss or damage sustained by reason of the lack of priority of the Insured Mortgage over certain environmental protection liens. This endorsement protects residential properties that are presently improved or will be in the future. 

The endorsement states:

The insurance afforded by this endorsement is only effective if the Land is used or is to be used primarily for residential purposes.

The Company insures against loss or damage sustained by the Insured by reason of lack of the priority of the lien of the Insured Mortgage over

(a) any environmental protection lien that, at Date of Policy, is recorded in those records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without Knowledge, or is filed in the records of the clerk of the United States district court for the district in which the land is located, except as set forth in Schedule B; or

(b) any environmental protection lien provided by any state statute in effect at the Date of Policy, except environmental protection liens provided by the following state statutes:

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent, a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

ALTA 7 Endorsement - Manufactured Housing Unit

ALTA 7 Endorsement is also called the manufactured housing endorsement. It says that the term"Land" includes the manufactured housing unit located on the land described in Schedule A at Date of Policy. It also states that the prefab pieces are considered personal property until they are erected into a finished unit and attached to the land. 

The endorsement states:

The ALTA 7 endorsement can be issued to owner’s, or loan policy. While ALTA 7.1-06 is meant for the owner’s policy, ALTA 7.2-06 is meant for loan policies. 

The term “Land” includes the manufactured housing unit located on the land described in Schedule A at Date of Policy. This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent, a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.  

ALTA 6 Endorsement - Variable Rate Endorsement

This endorsement provides the lender with coverage against loss due to the invalidity, unenforceability, or loss of priority of the lien of the Insured Mortgage which might be caused by the provisions in the Insured Mortgage that allow for a variable interest rate. 

As you can see that ALTA 6 endorsement is required for coverage against losses incurred due to variable interest rates, implying that this endorsement is only issued against the loan policy.  

The endorsement states:

The Company insures against loss or damage sustained by the Insured by reason of:

  1. The invalidity or unenforceability of the lien of the Insured Mortgage resulting from its provisions that provide for changes in the rate of interest.
  2. Loss of priority of the lien of the Insured Mortgage as security for the unpaid principal balance of the loan, together with interest as changed in accordance with the provisions of the Insured Mortgage, which loss of priority is caused by the changes in the rate of Interest.

Changes in the rate of interest”, as used in this endorsement, shall mean only those changes in the rate of interest calculated pursuant to the formula provided in the loan documents secured by the Insured Mortgage at Date of Policy.

This endorsement does not insure against loss or damage based upon:

  1. Usury, or
  2. Any consumer credit protection or truth in lending law.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent, a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. 

ALTA 5 Endorsement - Planned Unit Development

ALTA 5 Endorsement is also called Planned Unit Development and issued against loan policies. 

It is intended for use with the improved residential property that constitutes a planned unit development or is subject to a homeowners’ association or other recorded master agreement. This endorsement provides coverage against loss or damage resulting from certain risks related to planned unit developments.

The endorsement states:

The Company insures against loss or damage sustained by the Insured by reason of:

  1. Present violations of any restrictive covenants referred to in Schedule B that restrict the use of the Land or the forfeiture or reversion of Title by reason of any provision contained in the restrictive covenants. As used in this paragraph 1, the words “restrictive covenants” do not refer to or include any covenant, condition, or restriction (a) relating to obligations of any type to perform maintenance, repair, or remediation on the Land, or (b) pertaining to environmental protection of any kind or nature, including hazardous or toxic matters, conditions, or substances, except to the extent that a notice of a violation or an alleged violation affecting the land has been recorded in the Public Records at Date of Policy and is not excepted in Schedule B.
  2. The priority of any lien for charges and assessments in favor of any association of owners that are provided for in any document at Date of Policy and referred to in Schedule B over the lien of any Insured Mortgage identified in Schedule A.
  3. The enforced removal of any existing structure on the Land (other than a boundary wall or fence) because it encroaches onto adjoining land or onto any easements.
  4. The failure of the Title by reason of a right of first refusal to purchase the Land that was exercised or could have been exercised at the Date of Policy.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent, a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

If the property is a condominium unit under a recorded condominium regime ALTA 4-06 endorsement is required.

ALTA 22 Endorsement - Location

This endorsement provides coverage against loss or damage by reason of the failure of certain described improvements to be located on the Land at Date of Policy. It also provides coverage against loss or damage by reason of described improvements failing to have a specified street address.

ALTA 22 Endorsement can be issued for both owner’s and loan policies. 

The endorsement states:

The Company insures against loss or damage sustained by the Insured by reason of the failure of a (description of improvement), known as (street address), to be located on the Land at Date of Policy.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent, a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

If the property is located in an area of the country where it is customary to attach a map of the Land to the policy, then the lender may instead request the ALTA 22.1-06 endorsement.  

ALTA 28 Endorsement - Damage or Enforced Removal

ALTA 28 endorsement provides coverage in case of damages, or enforced removal or alteration of, existing buildings, caused by the exercise of use or maintenance rights associated with specified easements.

ALTA 28 is issued for both commercial and residential properties and intended for use on improved commercial or residential property only.

The endorsement states:

The Company insures against loss or damage sustained by the Insured if the exercise of the granted or reserved rights to use or maintain the easement(s) referred to in Exception(s)

_______________ of Schedule B results in:

  1. Damage to an existing building located on the Land, or
  2. Enforced removal or alteration of an existing building located on the Land.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent, a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

ALTA 33 Endorsement - Disbursement

It is intended for use with improved or unimproved commercial or residential property and issued against loan policies alone. It protects against the indebtedness arising due to construction loan advances occurring after the date of the policy. The ALTA 33 endorsement is often issued in conjunction with the ALTA 32.

The endorsement states:

  1. The Date of Coverage is amended to _______________________.
    1. a.The current disbursement is: $ ________________________]
    2. b.The aggregate amount, including the current disbursement, recognized by the Company as disbursed by the Insured is: $______________________]
  2. Schedule A is amended as follows:
  3. Schedule B is amended as follows:

[Part I]

[Part II]

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent, a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

ALTA 32 Endorsement - Construction Loan

ALTA 32 provides construction lenders coverage against mechanics’ lien risk arising out of services, labor, material, or equipment performed or supplied in the past. These endorsements are intended to work as combinations. One endorsement from the ALTA 32 Series is paired with the ALTA 33-06 endorsement. 

The endorsement states:

  1. Covered Risk 11(a) of this policy is deleted.
  2. The insurance [for Construction Loan Advances] added by Section 3 of this endorsement is subject to the exclusions in Section 4 of this endorsement and the Exclusions from Coverage in the Policy, the provisions of the Conditions, and the exceptions contained in Schedule B. For the purposes of this endorsement and each subsequent Disbursement Endorsement:
    1. “Date of Coverage”, is [________________________] [Date of Policy] unless the Company sets a different Date of Coverage by an ALTA 33-06 Disbursement Endorsement issued at the discretion of the Company.
    2. "Construction Loan Advance” shall mean an advance that constitutes Indebtedness made on or before Date of Coverage for the purpose of financing in whole or in part the construction of improvements on the Land.
    3. “Mechanic’s Lien,” shall mean any statutory lien or claim of lien, affecting the Title, that arises from services provided, labor performed, or materials or equipment furnished.
  3. The Company insures against loss or damage sustained by the Insured by reason of:
    1. The invalidity or unenforceability of the lien of the Insured Mortgage as security for each Construction Loan Advance made on or before the Date of Coverage;
    2. The lack of priority of the lien of the Insured Mortgage as security for each Construction Loan Advance made on or before the Date of Coverage, over any lien or encumbrance on the Title recorded in the Public Records and not shown in Schedule B; and
    3. The lack of priority of the lien of the Insured Mortgage, as security for each Construction Loan Advance, made on or before the Date of Coverage over any mechanics Lien, if notice of the Mechanic’s Lien is not filed or recorded in the Public Records, but only to the extent that the charges for the services, labor, materials or equipment for which the Mechanic’s Lien is claimed were designated for payment in the documents supporting a Construction Loan Advance disbursed by or on behalf of the Insured on or before Date of Coverage.
  4. This policy does not insure against loss or damage (and the Company will not pay costs, attorneys’ fees or expenses) by reason of any Mechanic’s Lien arising from services, labor, material, or equipment: 
    1. furnished after Date of Coverage; or
    2. not designated for payment in the documents supporting a Construction Loan Advance disbursed by or on behalf of the Insured on or before Date of Coverage.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent, a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

ALTA 34 Endorsement - Identified Risk Coverage

This endorsement provides coverage against loss or damage resulting from a final order or decree enforcing a specified defect, lien, or encumbrance (the “Identified Risk”). 

It provides a modified form of “Unmarketable Title” coverage against loss or damage resulting from the release of a prospective purchaser, tenant, or lender from the obligation to buy, lease, or lend as a result of the Identified Risk due to the violation of a contractual condition to deliver a marketable title. 

However, it is only applicable if neither the Company nor any other title insurer will insure over the Identified Risk on the same conditions as set forth in the endorsement. 

The endorsement states:

  1. As used in this endorsement “Identified Risk” means: [insert description of the title defect, restriction encumbrance or other matter] described in Exception ______ of Schedule B.
  2. The Company insures against loss or damage sustained by the Insured by reason of:
    1. A final order or decree enforcing the Identified Risk in favor of an adverse party; or
    2. The release of a prospective purchaser or lessee of the Title or lender on the Title from the obligation to purchase, lease, or lend as a result of the Identified Risk, but only if
      1. there is a contractual condition requiring the delivery of marketable title,and
      2. neither the Company nor any other title insurance company is willing to insure over the Identified Risk with the same conditions as in this endorsement.
  3. The Company will also pay the costs, attorneys' fees, and expenses incurred in defense of the Title by reason of the Identified Risk insured against by Paragraph 2 of this endorsement, but only to the extent provided in the Conditions.
  4. This endorsement does not obligate the Company to establish the Title free of the Identified Risk or to remove the Identified Risk, but if the Company does establish the Title free of the Identified Risk or removes it, Section 9(a) of the Conditions applies.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent, a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.