Page 64 - 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

c. ALTA 15.2-06 (Non-Imputation – Partial Equity Transfer): 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 15.2-06 endorsement is used
when the incoming partner, member or shareholder is named as Insured in
Schedule A of the policy and the interest being insured is limited to the partial
interest being acquired. In some states, issuance of a title insurance policy with
the owner of an equity interest as the named insured is not permitted because
the equity owner does not have an interest in real property and issuance is
prohibited under the state's monoline statute or does not fall within the statutory
definition of permitted title insurance.

III. Title Tips:

a. Detailed information must be furnished covering the structure of the proposed
transaction and the identities of the outgoing equity owners and incoming
investors.

b. An affidavit and indemnity from existing or departing partners, members or
shareholders will be required to issue the endorsement.

c. Audited financial statements from the outgoing equity owners who will be
executing the Non-Imputation Affidavit and Indemnity must be provided for
review and approval. In certain instances, a secured indemnity might be required.

d. The ALTA 15.2-06 endorsement is available only in a limited number of states.
Policies issued in connection with the ALTA 15.2-06 endorsement show the name
of the investor as the insured. Schedule A would still show the fee owner and fee
owner's estate as the interest in real property insured in Schedule A.

e. All blanks in each of the ALTA 15 series endorsements must be The
blanks identify the specified persons or entities whose action, inaction, or
knowledge will not be imputed to the These persons or entities must be
the same persons or entities who signed the affidavit and indemnity agreement.

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