Page 63 - Guide to the Most Requested Commercial Title Insurance Endorsements eBook

ALTA Table of Contents Quick Reference Index

ENDORSEMENT 1 2 3 1 2 3 4 5 6

NON-IMPUTATION ENDORSEMENT SERIES
ALTA ENDORSEMENTS 15-06, 15.1-06, 15.2-06

I. Purpose:

The ALTA 15 series of endorsements provides coverage to a party acquiring an equity
interest in real property through the purchase of interests in a partnership, shares of
stock in a corporation, or membership interests in a limited liability company that is
vested in title by insuring against knowledge of off-record matters that would
otherwise be imputed by law to the Insured, but which matters are not known to such
new acquiring party.

The ALTA 15 series of endorsements may be issued with an owner’s policy.

II. Coverage Provided:

a. ALTA 15-06 (Non-Imputation – Full Equity Transfer): This endorsement provides
assurance that liability under the policy will not be denied on the grounds that the
insured had knowledge of adverse matters imputed to it by operation of law
through existing, former, or departing members or partners, or individuals (i.e.,
equity owners) associated with corporations, lenders, or borrowers, respectively.
It insures a party acquiring the entire equity interest of the entity holding title by
providing a partial waiver of Exclusions 3(a), 3(b), and 3(e) regarding loss or
damage that would otherwise be excluded from coverage by reason of the action,
inaction, or knowledge of specified persons (e.g., outgoing partners, members or
officers) associated with the entity being acquired.

b. ALTA 15.1-06 (Non-Imputation – Additional Insured): This endorsement provides
assurance that liability under the policy will not be denied on the grounds that the
insured had knowledge of adverse matters imputed to it, by operation of law,
through existing, former, or departing members or partners, or individuals
("equity owners") associated with corporations, lenders, or borrowers,
respectively. The ALTA 15.1 contemplates a partial transfer and limits the
coverage provided to the percentage interest acquired by the new investor in the
entity holding title. It insures a party acquiring a partial equity interest in the entity
holding title by providing a partial waiver of Exclusions 3(a), 3(b), and 3(e)
regarding loss or damage that would otherwise be excluded from coverage by
reason of the action, inaction, or knowledge of specified persons (e.g., outgoing or
remaining partners, members or officers) associated with the entity being
acquired. The ALTA 15.1-06 has been formatted for situations where the entity
holding title has an existing policy and is the named insured in Schedule A of the
existing policy. The ALTA 15.1-06 endorsement identifies the incoming partner,
member, or shareholder as an “Additional Insured” for purposes of the
endorsement. It requires the consent of the Insured under the original policy
(the entity vested in title) for the issuance of the endorsement.

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