CLTA Assurances Concerning Negative Covenants in a Lease Endorsement Guideline 124.3

Explanation:

This Endorsement provides the lessee, under a leasehold policy, or lender on a leasehold loan policy, with assurances that the lessor's negative covenants (acts not to be done on the property owned by the lessor which is contiguous to the leased land except for intervening public streets, alleys or sidewalks) are binding upon the lessor, certain successive owners and certain successive mortgagees while in possession of the burdened contiguous real property described in the lease.

Underwriting Requirements:

(1) This endorsement is often requested when insuring shopping center developments.
(2) This endorsement may be issued when all of the following requirements are met:
(a) The land to be affected by the negative covenants must be specifically described in the lease.
(b) The negative covenants contained within the lease must run with the land and bind successive lessors.
(c) A complete search of the burdened property must be made.
(3) Approval to issue this endorsement must be obtained from the appropriate Stewart Title Guaranty underwriting personnel.
(4) When negative and affirmative covenants are to be insured, use CLTA 124.3 and CLTA 124.2 Endorsements.