The ALTA 9 series of endorsements includes private rights endorsements. These are the ALTA 9.9 endorsement, which is the private rights for an owner’s policy, and the ALTA 9.6 private rights endorsement for a loan policy. Both of these endorsements insure against what are called private rights. Those private rights are defined as an option to purchase or a right of first refusal or a right of prior approval of a future purchaser or occupant.
The endorsement also defines the term covenant, meaning a condition, limitation, or restriction in a document recorded in the public records at the date of policy. These endorsements provide assurance against loss or damage sustained by the insured owner or lender as it may be in the event that enforcement of one of those three private rights contained in a covenant of record causes a loss of the insurance title.
These endorsements do not insure against loss or damage regarding any covenant that’s contained in an instrument that creates a lease interest or any covenant relating to obligations of any type to perform maintenance, repair, or remediation on the land, nor do they protect against any covenant relating to environmental protection, nor do they protect against any private right contained in an instrument that is specifically identified as being an exception in schedule B of the policy.
Working with a Title Company
The endorsements come with a blank for this particular provision and it is up to the title company to carve out coverage in the event that there is in fact a private right contained in a document and the title company does not intend to provide assurance against enforcement of that particular private right. The title company will do so by making reference in the endorsement to the dock exception number on schedule B where that private right is contained.