From Barns to Big Boxes and Bungalows

171 Pages·2006·3.62 MB·English

CHICAGO TITLE INSURANCE COMPANY

2006 CLE Seminar Presentation

From Barns to Big Boxes and Bungalows:
Title Insurance Tales of a Mixed Use
Development
CHICAGO TITLE INSURANCE COMPANY

2006 CLE Seminar Presentation

From Barns to Big Boxes and Bungalows:
Title Insurance Tales of a Mixed Use Development

Table of Contents

Table of Contents
Map Index
Exhibit Index
Topics Index

RAW LAND ACQUISITION

I. Water and Sewer Assessments 1
II. Foreclosure 1
III. Foreclosure and Tax Liens 2
IV. Temporary Construction Easement 4
V. Residential Home with Lease Option 4
VI. Railroad Car 5
VII. Single Headstone 5
VII. Growing Crops 7
IX. Rogue Deed 8
X. Holographic Will 9
XI. Re-recording Error and Intervening Judgment 10
XII. Restriction for Agricultural Uses 11
XIII. Gap Between Parcels 11
XIV. Improvements and Use By Third Party 12
XV. Timber Deed 13
XVI. Controlled Access Highway 14
XVII. Fence Encroachment 15
XVIII. Access Road Over Existing “residential” lot 15

DEVELOPMENT PHASE

I. Property Tax Issues 17
II. Declarations of Covenants, Conditions and Restrictions 22
a. Common Law and the “Scheme of Development” 23
b. Applicability: Planned Community Act 24
c. Creating a Master Association under the Planned Community Act 25
d. Owners’ Associations 26
e. Development and Use Restrictions 27
f. Transfer of declarant’s rights 33
g. Architectural Review / Control Committee 34
h. Assessment liens 34
i. Amendments and Modifications 41
j. Expirations and Extensions 43
k. Terminations 45
l. Change of circumstances 46
m. Annexing additional “future development” areas of adjoining 47
properties
n. Indexing provisions – different under condo vs. PCA vs. PUD 48
o. Common areas 50
p. Consent of Lender 52
III. Plats 53
IV. Surveys 64
a. Survey Matters 64
b. Legal Descriptions 68
c. Surveys and Survey Coverage for Clients 68
d. NC Surveying standards and statutes of limitations 69
e. ALTA/ACSM Standards 69
f. Hot Topic: Contracting to sell unplatted lots 69

COMMERCIAL DEVELOPMENT LOANS

I. Loan Policy Underwriting Philosophy 76
II. Deed of Trust 76
a. Extended Coverage 76
b. Future Advances Construction Loan / Revolving Line of Credit 77
c. First Lien Priority 79
d. Release Provisions 81
III. Date-down Requirements 82
IV. Insurance over Mechanics’ and Materialmen’s Liens 83
V. Insured Legal Description 87
VI. Access / Insured Appurtenances 88
a. Direct Access 88
b. Indirect Access over Easement 89
c. Rights under Master Declaration 90
VII. Affirmative Coverage over Exceptions 91
a. General Utility Easements 91
b. Specific Easements 92
c. Encroachments 93
d. Access to Burial Ground 93
VIII. Survey Coverage 93
IX. Tenants 94
X. Zoning 95
XI. Subdivision 97
XII. Tax Parcel 98
XIII. Creditors’ Rights 99
XIV. Entities 100
a. Names -- Record Title 100
b. Power of Attorney for Managing Member 101
XV. Gap Coverage 102
XVI. Other Endorsements 104

COMMERCIAL SALES

I. Construction of The Shoppes at Sumac Park 105
A. Master Covenants,, Conditions and Restrictions 106
B. Recorded Plat Issues 109
C. Pre-Existing Deed of Trust 110
D. Claim of Lien against Fee Owner 110
E. Prior Memorandum of Lease 113
F. Zoning 114
G. Reciprocal Easement Agreement 117
H. Survey Matters 118
I. Requirement for a Valid Lease Agreement and Deed of Trust 120
J. Leasehold Endorsements 123
II. Lease to Retail Tenant 125
A. Claims of Lien against Sum-Mac 125
III. Sale of Outparcel 127
A. Non-Compete or Exclusive Use Limitations 128

CONDOMINIUMS

I. Purchase of Undeveloped Land 129
a. Title Insurance Policies (Owner and Loan) 129
b. Option to Purchase 130
II. Purchase of Individual Units 131
a. Public Offering Statement 131
b. Contracts to sell units 132
III. Declarations and Plat 133
IV. Owners’ Association 134
V. Purchaser and Lender Title Insurance Policies 134
VI. Isolated Issues with Come Unit Sales 135
a. Incorrect Unit Number 136
b. Association Mechanics’ Liens / Encumbrances 136
c. Association Assessments 137
d. Association Fines 137
e. Encroachments 139
f. Relocation of Boundaries 139
g. User Fees 140
h. Incorrect Tax Parcel Number 140
VII. Phase 3 of the Condominium Development; Purchase and Credit Line Deed 140
of Trust Modification
a. Loan Modification for Purchase and Construction 140
b. Supplemental Declaration, Plats, Public Offering Statement 141

SINGLE FAMILY DEVELOPMENT

I. Purchase by Builder 143
a. Restrictive Covenants and Conditions 143
b. The Recorded Plat 144
c. The Survey 146
II. Purchase by Individual Homeowner 147
a. Vesting title in the new owner 147
III. Taxes and assessments 150
IV. Mechanics’, Laborers’ and Materialmen’s Liens 152
a. Services provided to the owner of the property 152
b. Services provided to a contractor on behalf of the owner 153
V. Homeowners’ Associations 153
VI. Title Insurance Policies 154
a. Loan Policies 154
b. Owner’s Policies 154
VII. Deeds of Trust and Mortgages 155
Topic Index

Topic Subtopic Raw Dev Dev Comm Condo Single
Land Phase Loan Dev Family
Access Generally 56, 64 109 145
Controlled 14 64 88
Affirmative Utility 91 119
Coverage easements
Assessments 1 152
Burial Grounds 5 67 93
& cemeteries
Closing 134
Protection
Condominium Assessments / 137
Dues
Boundary 139
relocation
Contracts to sell 132
units
liens on 136
common areas
Plat – as-built 133
Public Offering 131
Statement
Supplements / 141
annexation
Unit vs. 136
Address
User fees 140
Contiguity 64
Contracts to Sell 69 132
Creditors’ 99
Rights
Crops 7
Deeds of Trust Date down 82
Future Advance 77
Lien Priority 79 110
Modification 140
Mortgage 155
Satisfaction
Purchase 87
Money vs.
Construction
Topic Index –Page 1 of 7
Topic Subtopic Raw Dev Dev Comm Condo Single
Land Phase Loan Dev Family
Deeds of Trust Release 81
provisions
Revolving Line 77
of Credit
Easements Affirmative 91
Coverage
Appurtenant 89
Reciprocal 116
Easements
Temporary 4
Construction
Encroachments 15 93
Entities 100 148
Federal Tax 2
Liens
Foreclosure 1
Gap Coverage 102
Grave (see burial
grounds)
Improvements 67
Incompetents 150
Judgments Against Buyer 147
Intervening 10
Leases &
Tenants
Deed of Trust 122
Endorsements 123
License 12
Recorded 4 94 105,
Memorandum 113,
of Lease 120
Subordination, 121
Nondisturbance
& Attornment
Unrecorded 95
Legal 68 87
Description
Mechanics’
Liens
Affidavits & 84 152
Indemnities
Topic Index –Page 2 of 7
Topic Subtopic Raw Dev Dev Comm Condo Single
Land Phase Loan Dev Family
Mechanics’ Lessee 125
Liens
Owner- 83 110 152
Developer-
Builder
Purchase 87
Money vs.
Construction
Subcontractor 153
Subordinations 85 153
Minors 150
Option to 4 130
Purchase
Ownership
Interests
Merger 100
Names 100
Power of 101 149
attorney
Tenancy-by- 8 147
entirety
Tenancy in 8 148
common
Plats
Commercial
Common Areas 60
Condominium 133
Condominium –
Relocation of
Boundaries
Generally 53 109 144
Legend 145
Requirements 53
Restrictions
Roads & 56, 61 145
Access
Single Family 144
Supplement / 141
annexation
(condominium)
Topic Index –Page 3 of 7
Topic Subtopic Raw Dev Dev Comm Condo Single
Land Phase Loan Dev Family
Powers of Entities 101 149
Attorney
Property Taxes
Associations 18
Burial sites 18
Carveouts of 20 151
developed /
sold parcels
Condominiums 140
Developer 17 150
Improvements 17 151
Indemnities 21
Outsales 151
Partial 19 151
Payments
Personal 19 151
Property
Prepayments 19 151
Releases 20 151
Tax Parcel 98
Endorsement
Railroads 5 67
Recording Re-recording 10
Restrictive
Covenants
Agricultural 11
Use
Amendments & 41
Modifications
Annexing / 47
Future
Development
Architectural 34
Review
Assessments / 34 137 153
Dues
Change of 46
Circumstances
Commercial 128
“use” and
noncompete
Topic Index –Page 4 of 7
Topic Subtopic Raw Dev Dev Comm Condo Single
Land Phase Loan Dev Family
Restrictive Common Areas 50 133
Covenants
Common Area 136
– liens
Common area - 139
Encroachments
Common law – 23
Scheme of
Development
Condominium 133
Declarants’ 33
Rights
Endorsements 107
Expiration 43
Extensions 43
Fines 137
Generally 22 143
Indexing 48
Lender Consent 52
Master 25 90 106
Declarations
Owners’ 26 134 153
Associations
Planned 24
Community Act
Residential lot 15 30
as road
Residential vs.
Single family
Supplement 141
Terminations 45
Use 27 143
Restrictions
Topic Index –Page 5 of 7