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Condo & PUD Endorsements
When the property sits inside a condominium or HOA regime, these endorsements cover the regime-specific risks.
DISCLAIMER: For informational and educational purposes only. Nothing here is legal advice, a title opinion, or a commitment to insure, and no attorney-client relationship is created. No one may rely on this content for any transaction or legal decision. Coverage is governed solely by the terms of an issued policy or commitment, and requirements vary by state and underwriter. Consult your own attorney and underwriter. Views are my own and not those of my employer.
The minute version
Condominiums: ALTA 4 and 4.1
- ALTA 4 (Assessments Priority, loan): insures a condo-unit lender on several regime matters: the unit is part of a valid condominium regime, covenant violations and reverter, priority of the mortgage over condo assessment liens, separate tax parcel, encroachments, and rights of first refusal.
- ALTA 4.1 (Current Assessments): the same, except it insures only that no assessments are due and unpaid at the Date of Policy. No priority over future assessments. Available on loan or owner's policies.
Planned unit developments: ALTA 5 and 5.1
- ALTA 5 (Assessments Priority, loan): covers a PUD lender against covenant violations or forfeiture covenants, lack of priority over HOA assessment liens, enforced removal for encroachments, and exercise of a right of first refusal.
- ALTA 5.1 (Current Assessments): the same, but only that no HOA assessments are due and unpaid at the Date of Policy.
Why the difference matters
- Some states give associations a super-priority for a slice of unpaid assessments. Whether the lender can get priority coverage depends on state law and the form the state allows.
- "Current assessments" coverage is a snapshot at closing, not ongoing protection.
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