Every title insurance policy is unique and should be crafted to fit the property’s specific needs. Endorsements allow a title insurer to tailor a policy to meet the needs of a buyer and their property. In this article, we are going to talk about the ALTA mezzanine endorsement.
What Does the Mezzanine Endorsement Do?
The Mezzanine Endorsement:
- makes the Mezzanine Lender an assignee of payments under the Owner’s Policy not to exceed the debt owed to the Mezzanine Lender (but does not name the Mezzanine Lender as an additional insured) in paragraph 2 of the Endorsement,
- provides Nonimputation coverage to the Mezzanine Lender in paragraph 4 of the Endorsement,
- includes “Fairway” coverage in paragraph 5 of the Endorsement, acknowledging that coverage will not be adversely affected because of transfer of ownership interests (direct or indirect) in the insured,
- expressly retains a right to interplead in paragraph 7 of the Endorsement, and
- reserves the title insurer’s subordinate rights of subrogation and indemnity after the Mezzanine Lender has recovered its indebtedness in paragraph 8 of The Endorsement. The Mezzanine Endorsement may be issued simultaneously with or after the Date of Policy, and requires consent of the insured under the Owner’s Policy, since it affects payments to the insured.
Contact Commercial Partners Title Company
If you are looking for help with your next commercial real estate transaction, our experts are ready and waiting to assist you. We have been facilitating commercial title insurance transactions for decades and have built up a reputation as being experts in the industry. We can help you through each and every aspect of your transaction and ensure that you are ready for the closing table. Reach out to the experts at Commercial Partners Title Company today to learn more about how we work and how we can help you through your next real estate transaction!