In this article, we are going to focus on the ALTA commercial participation interest endorsement and when it can be used when underwriting title insurance policies.
ALTA Commercial Participation Interest Endorsement
ALTA Endorsement 30.1-06 is designed for loan policies for commercial transactions in situations where the loan agreement includes a participation interest. The participation interest is based on the equity in the Title, increase in value of the Title or cash flow as defined in the loan documents. The endorsement protects the lender against loss or damage by reason of (a) the invalidity or unenforceability of the lien of the Insured Mortgage resulting from the provisions of the Insured Mortgage or Loan Documents containing a participation interest; (b) lack of priority of the lien of the Insured Mortgage at Date of Policy, securing (i) the unpaid principal balance of the loan and (ii) the interest on the loan, including the participation interest, if any, which lack of priority is caused by the provisions in the Loan Documents for payment or allocation to the Insured of any participation interest.
Request Our Free Endorsement Book
For more information on specific ALTA endorsements that can be utilized in lender and owner title insurance policies, request a copy of our free endorsement book. If you have specific questions about a property, don’t hesitate to reach out to our experts. Commercial Partners Title has been facilitating commercial transactions for decades. We have a vast array of knowledge that can be utilized to ensure that your transaction goes off without a hitch. Contact us today at our downtown Minneapolis office to learn more!