Environmental Protection Lien

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ENVIRONMENTAL PROTECTION LIEN
COMMERCIAL ENVIRONMENTAL LIEN
ALTA ENDORSEMENT FORMS 8.1-06 and 8.2-06
PURPOSE
These endorsements provide affirmative insurance that the lien of the Insured Mortgage has
priority over unrecorded or unfiled environmental protection liens.
SECTION OF POLICY AMENDED BY ENDORSEMENT
This endorsement reiterates the coverage afforded by Covered Risk 5 (d). In addition, the ALTA
8.1-06, for use with loan policies insuring residential mortgages, adds affirmative coverage
against loss caused by priority over the Insured Mortgage of any environmental protection lien
created by a state statute, if the statute is not disclosed in the endorsement or the lien is not
shown as an exception in Schedule B of the policy. The ALTA 8.2-06, which was developed for
commercial property, does not contain this additional coverage.
BASIS FOR PROVIDING COVERAGE
You may issue the ALTA 8.1-06 endorsement to any ALTA Loan Policy covering a residential
mortgage loan (1 to 4 family) if all of the following requirements are met:
1.
No environmental liens are recorded or filed which affect the Title to the Land which is
described in the policy; or
2.
You have taken an exception in Schedule B to any environmental liens which have been
recorded or filed.
3.
You must insert the citation to any state statute which creates secret or hidden
environmental protection liens or environmental liens which have “super priority”. By this
we mean a statute that either:
A. Does not require the filing of any notice of the lien in the county recorder’s
office where the land is located; or
B. Gives the lien a priority over all outstanding liens or encumbrances.
A space for this citation is provided at the end of paragraph (b) of the endorsement. If there are
no citations for your state, indicate that by inserting the word “none” in the blank.
You must consult the Company’s underwriting adviser for instructions as to which,
if any, citations are applicable.
CAUTION:
NOTICES OF FEDERAL ENVIRONMENTAL LIENS CREATED BY THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE, CLEANUP AND LIABILITY ACT
(CERCLA) ARE REQUIRED TO BE RECORDED IN COUNTY RECORDERS’ OFFICES
ONLY IF THE STATE HAS ADOPTED THE UNIFORM FEDERAL LIEN REGISTRATION
ACT OR SIMILAR STATUTE. OTHERWISE, CONSTRUCTIVE NOTICE OF THE LIENS
EXISTS IF THE NOTICE IS FILED WITH THE CLERK OF THE U.S. DISTRICT COURT
FOR THE DISTRICT IN WHICH THE LAND SUBJECT TO THE LIEN IS LOCATED.
Therefore, if the state in which the Land lies has not adopted such an act, you must search the
records in the office of the Clerk of the U.S. District Court for such liens before issuing this
endorsement.
You may issue the ALTA 8.2-06 (Commercial Environmental Lien) endorsement to any ALTA
Loan Policy covering a commercial mortgage loan (including multi-family residential), or an
ALTA Owners Policy if all of the following requirements are met:
1.
You have checked BOTH the office you would normally check under state law and the
District Court for the District in which the Land is located, even if your state has adopted
the Uniform Federal Lien Registration Act or similar statute as discussed above.
2.
No environmental liens are recorded or filed which affect the Title to the Land which is
described in the policy; or
3.
You have taken an exception in Schedule B to any environmental liens which have been
recorded or filed.
As mentioned earlier, the commercial form does not include the second coverage, and that
should not be added without consulting your Company underwriting advisor.
MODIFICATION
In the event that modification of an endorsement is requested, it is necessary to consider your
state regulatory requirements for filing and approval of forms. If the endorsement is modified, the
endorsement is not an ALTA form and should not reference ALTA in the title. You must obtain
the approval of the Company’s underwriting adviser before complying with any request for a
modification.
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