Exceptions to Form 9 Coverage must be Express

07/05/2011 8:57 PM | Anonymous

The Form 9 series of endorsements provide some valuable coverages for lenders and owners, over and above what is covered by the basic title policy.  And it takes additional work and examination in order to underwrite and issue.  That's why they carry a 10% additional premium in Florida. 

So we wanted to reiterate what we have all been taught over the years.   That when you are taking exceptions to the coverages provided in any of the form 9 series of endorsements -- the exception must be express, not simply a general reference to "covenants recorded in O.R. Book ...."  (after all, if that general exception worked, the Form 9 wouldn't provide any meaningful coverage).

Although less detailed exceptions might be upheld by the courts, the better practice -- where the Declaration of Condominium or restrictive covenants include a payment requirement or a right of first refusal or any of the other matters covered by the version of form 9 you plan to issue -- is to first take the general exception for the Declaration, then spell out that it includes the specific item (ideally with a page number reference for the offending matter), and then to expressly state that coverage under any form 9 endorsements is not available for this matter.

Each underwriter has their own standards and suggested language for taking exceptions to form 9 coverage.  

Please take a few minutes to refresh yourself as to the coverages being provided under Form 9, and check with your underwriter as to their preferred language for exceptions and the search and examination standards you are expected to follow when writing on that company. 

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