T-19 Restrictions Checklist

The T-19 endorsement is applicable to Texas loan policies.  The T-19.1 endorsement applies to owner’s policies.  Stewart provides checklists to assist in the preparation of these forms including a T-19 checklist for dealing with reversionary rights; violations of building setbacks and easements;  a T-19 checklist for assessments, charges and liens; options or right of first refusal or prior approval a checklist for mineral interests,  and a T-19 checklist for matters discovered by a survey.  Stewart also provides a combined checklist for the T-19.1 endorsement dealing with the same issues.

FORM T-19 LOAN POLICY ENDORSEMENT
RESTRICTIONS CHECKLIST
(Revised JANUARY, 2014)

GF NO.                                                             

Effective February 1, 2010, do not physically delete any text from the face of the Form T-19 Endorsement itself. When coverage deletion from the Endorsement is necessary, place the following deletion statement in Schedule “B” of the Loan Policy as a separately-numbered item: “The following subparagraph(s) of the attached Form T-19 Restrictions, Encroachments, Minerals Endorsement are deleted:                                   .”

NOTE: In this Checklist, the terms “improvement” or “improvements” refer to any improvement affixed to either the insured land or adjoining land and INCLUDE landscaping, lawn, shrubbery, or trees.

EXAMINE ANY AVAILABLE SURVEY, RE-SALE CERTIFICATE, and OR FILING BY OWNER’S ASSOCIATION WHICH MAY INDICATE A CURRENT SIGNIFICANT VIOLATION OF RESTRICTIVE COVENANTS: Unless you obtain one of the following, you must EXCEPT in Loan Policy Schedule “B” to the apparent violation (no related deletion is required in the T-19 Endorsement):

_____  Appropriate waiver or variance from the developer, owner’s association, or architectural control committee, if any, having the necessary power to provide a waiver or variance.

_____  Underwriter Approval to Omit Violation Exception:
           Describe Omitted Item:                                                                                
            Approved by:                                                              Date:                                    

EXAMINE ALL RESTRICTIVE COVENANTS (deed or declaration) FOR ANY OF THE FOLLOWING FEATURES:

REVERSIONARY RIGHTS:  Restrictions provide that, as a penalty for violating the restrictions, an owner forfeits title, and it reverts to a prior owner.

            Reversionary rights still in force are not subordinated to the type of mortgage being insured: YOU MUST SEPARATELY EXCEPT TO THE REVERSIONARY RIGHTS IN SCHEDULE “B” OF THE LOAN POLICY.  UNLESS UNDERWRITER WAIVER IS OBTAINED, YOU MUST ALSO DELETE SUB-PARAGRAPHS NOS. 3(a)(i), 3(a)(ii), and 3(e)(i) FROM THE T-19 ENDORSEMENT.

                       Underwriter Approval for No Deletion:
                        Date:                          
                        By:                                                     

____ Original restrictions (or subsequent amendment) expressly subordinate reversionary rights to the type of mortgage being insured:  YOU MUST SEPARATELY EXCEPT TO THE REVERSIONARY RIGHTS IN SCHEDULE “B” OF THE LOAN POLICY. (No related deletion is necessary in the T-19 Endorsement.)

____ Subsequent recorded amendment to restrictions terminates reversionary rights, but keeps the restrictive covenants in force: YOU MUST CITE RESTRICTIONS AND AMENDMENT UNDER NO. 1 OF SCHEDULE “B” IN THE LOAN POLICY, BUT YOU MAY OMIT A SEPARATE EXCEPTION TO THE REVERSIONARY RIGHTS. (No related deletion is necessary in the T-19 Endorsement.)

____ Restrictions are date-expired without extension of time, OR the sole restrictive covenant enforceable by reversion is an illegal ownership/occupancy limitation based on race, ethnicity, etc.: DO NOT CITE THE RESTRICTIONS UNDER NO. 1 IN SCHEDULE “B” OF THE LOAN POLICY, AND DO NOT MAKE OTHER EXCEPTION TO THE REVERSIONARY RIGHTS. (No related deletion is necessary in the T-19 Endorsement.)

BUILDING SETBACKS AND EASEMENTS: If restrictions impose building setback requirements or create utility-type or other easements, you must separately except to these features in Schedule “B” of the Loan Policy. For handling of violations, protrusions, and encroachments, see “Building Setback Violations” and “Easement Encroachments” in our Form T-19 Survey Checklist.

ASSESSMENTS, CHARGES, AND LIENS: Restrictions provide for collection of a special or ongoing assessment, fee, or charge from the owner of the mortgaged property, with or without a lien against the land, and/or create a lien to enforce collection of a monetary penalty for violation of restrictions.

____ Restrictions create a lien to enforce collection which is not made subordinate to the type of mortgage being insured, and no loan-specific subordination agreement is obtained from the entity entitled to collect the secured assessment, charge, fee, or penalty: YOU MUST SEPARATELY EXCEPT TO THE OBLIGATION AND LIEN IN SCHEDULE “B” OF THE LOAN POLICY.  UNLESS UNDERWRITER APPROVAL IS OBTAINED, YOU MUST ALSO DELETE SUB-PARAGRAPHS NOS. 3(a)(i), 3(a)(ii), 3(a)(iii), 3(e)(i), and 3(e)(ii) FROM THE T-19 ENDORSEMENT.

                      Underwriter Approval for No Deletion:
                        Date:                          
                        By:                                                     

_____ Restrictions create a lien to enforce collection which is made expressly subordinate to the type of mortgage being insured; or a loan-specific subordination agreement has been obtained from the entity entitled to collect the secured assessment, charge, fee, or penalty: YOU MUST SEPARATELY EXCEPT TO THE OBLIGATION AND LIEN IN SCHEDULE “B” OF THE LOAN POLICY. (No related deletion is necessary in the T-19 Endorsement.)

_____ Lien created by restrictions is or has become subordinated to the mortgage being insured, BUT secured assessments, charges, etc., have not been paid through date of the Mortgagee Policy: YOU MUST SEPARATELY EXCEPT TO THE OBLIGATION AND LIEN IN SCHEDULE “B” OF THE LOAN POLICY.  UNLESS UNDERWRITER APPROVAL IS OBTAINED, YOU MUST ALSO DELETE SUB-PARAGRAPHS NOS. NOS. 3(a)(i), 3(a)(ii), 3(a)(iii), 3(e)(i), and 3(e)(ii) FROM THE T-19 ENDORSEMENT.

                      Underwriter Approval for No Deletion:
                        Date:                          
                        By:                                                     

_____ Restrictions create an assessment, charge, fee, or penalty, but do not impose any lien to enforce collection: YOU MUST SEPARATELY EXCEPT TO THE OBLIGATION IN SCHEDULE “B” OF THE LOAN POLICY. (No related deletion is necessary in the T-19 Endorsement.)

OPTION OR RIGHT OF FIRST REFUSAL OR PRIOR APPROVAL:  Restrictions create a purchase-option, right of first refusal, or right of prior approval in favor of a third party, exercisable when an owner contracts to sell the property being mortgaged.

_____ In the sale producing the insured mortgage, no written release/waiver is obtained from the party entitled to enforce the option/right, and no documentation of implied waiver is furnished:  YOU MUST SEPARATELY EXCEPT TO THE OPTION/RIGHT IN SCHEDULE “B” OF THE LOAN POLICY.  UNLESS UNDERWRITER WAIVER IS OBTAINED, YOU MUST ALSO DELETE SUB-PARAGRAPHS NOS. 3(e)(i) and 3(e)(ii) FROM THE T-19 ENDORSEMENT.

                       Underwriter Approval for No Deletion:
                        Date:                          
                        By:                                                     

_____ In the sale producing the insured mortgage, a written waiver or release is obtained from the party entitled to enforce the option/right, OR satisfactory documentation of implied waiver is furnished:  YOU MUST SEPARATELY EXCEPT TO THE OPTION/RIGHT IN SCHEDULE “B” OF THE LOAN POLICY. (No related deletion is necessary in the T-19 Endorsement.)