T-19.1 Guideline - (Restrictions, Encroachments, and Mineral Endorsement-Land; Owner's)

Explanation:

This endorsement to the Owner's policy insures against violations of restrictions, encroachments on the land from adjoining land, and damage by reason of mineral development. 

Underwriting Requirements:

Please also see P-50C and R-29C (residential) or R-29D (not residential) as applicable to endorsement T-19.1.

(1)          Restrictions: Review all restrictions to:

(a)          Verify whether the restrictions create easements, options to purchase or rights of first refusal to purchase, or right of reentry, or an existing right of prior approval of a purchaser, possibility of reverter or right of forfeiture because of violations. If any of these provisions appear in the restrictions, separately and explicitly except to those provisions in Schedule B. For example, separately except to "easement for ___ set forth in".

(b)          Verify that any maintenance lien in the Covenant(s) is expressly subordinate to the lien of the Insured Mortgage and that prior assessments are paid before closing. If the Covenant(s) create a maintenance lien and do not expressly subordinate the maintenance lien to the lien of the Insured Mortgage, delete Section 3(a).      

(c)            Verify whether the existing use materially violates the restrictions. If the use violates the restrictions, except to the violation in Schedule B.

In any of the above cases, if no exception is taken in schedule b, (a) obtain a release, (b) determine that the right as terminated or been waived or (c)  contact a Stewart underwriter.

(2)          Encroachments:

(a)          Require a survey. Except in Schedule B to any encroachments over building lines, property lines, or easements.

( b)          If Improvements encroach over more than one half of the width of an easement, delete Section 4(c) of the Endorsement, unless you secure underwriter approval.

(c)           If Improvements encroach over adjoining land or onto a road, delete Section 4(b), unless you secure  underwriter approval.

(d)          If Improvements encroach over setback lines by more than one foot, delete Section 3 (b), unless you secure underwriter approval.

 (3)         Minerals:

In order to provide the coverage of paragraph 2 because of development of minerals, comply with one of the following requirements:

(a)          verify that there are no outstanding minerals (other than royalties) or that surface rights have been waived;

(b)          on single family residential property within a platted subdivision and within municipal boundaries, you may provide the coverage even if there are outstanding minerals unless you know that the subdivision has actual mineral development;

(c)           on land to be improved as an apartment complex and within municipal boundaries in a developed area, you may provide the coverage even if there are outstanding minerals unless you know that the immediate area has actual mineral development;

(d)          on land to be improved as an office building or shopping center and within municipal boundaries in a developed area, you may provide the coverage even if there are outstanding minerals unless you know that the immediate area has actual mineral development;

(e)          secure underwriter approval. Factors of relevance on other land include per cent of minerals outstanding, zoning prohibitions, waivers of surface rights, and development in the area.

(f)           for additional information about mineral issues please review Bulletins TX 2009005 and TX 2012-006

If you cannot comply with these guidelines, delete paragraph 2.

(4)          Notices of Violation of Environmental Covenants

If a notice of violation of an environmental covenant has been recorded, except to it in Schedule B.

For further guidance, refer to the applicable subsections in Section 11.04 of the National Underwriting Manual on Virtual Underwriter http://www.vuwriter.com/vumanuals.jsp?displaykey=UM00000208

Please see the following Texas Bulletins:
TX2015002 - UNDERWRITING - HB 40 By Darby Relating to Exclusive Jurisdiction of the State to Regulate Oil and Gas Operations and Express Preemption of Local Regulations of These Operations (Effective May 18, 2015)
TX2014006 - RATES AND/OR FORMS UPDATE - T-19 Series Endorsements (T-19.1 for Owner’s Policies and T-19 for Loan Policies after 2014 Revisions)
TX2012001 - T-19.2 and T-19.3 and Mineral Credits
TX2011001 - Writing Mineral Coverage after Commissioner's Order 10-0959 Order in 2008 Rate Case
TX2009007 - Oil and Gas and Other Minerals Supplement
TX2009005 - Resolution of Mineral Exception Issue; Commissioner's Order 09-0650

Additionally, see the Texas Underwriting Manual 12.16 Mineral Rights on Virtual Underwriter.