NY TIRSA Contract Vendee Endorsement Fee or Leasehold Guideline 1995

Explanation:

Purpose Of Endorsement:
This endorsement modifies the 1992 ALTA Owner’s Policy to provide assurances to the insured as to the enforceability of the right to receive a deed under the contract, provided the insured fully performs.
It is anticipated that the endorsement will be used to insure (a) the interest of a vendee in possession under an installment sales contract, in which case the policy amount will probably reflect the entire price, or (b) the vendee is involved in a sophisticated transaction involving a large down payment, in which case it is more likely that the amount of insurance will be for the contract deposit only.

Underwriting Requirements:

Requirements For Issuance:
(a) Contract of sale must be reviewed and the contract, or a memorandum thereof, must be recorded;
(b) Contract must contain a lien law clause;
(c) Vendor’s obligation to convey under the contract must be absolute and binding on heirs, successors and assigns, if the vendee fully performs;
(d) A credit must be given upon the issuance of an owner’s policy, for the amount paid for the contract vendee policy.
Issued With The Following Policies:
Applicable to owner’s or leasehold policies issued for executory contracts.
Premium:
None: The rate manual lists this endorsement under 1, 25 (C) as a special risk endorsement, and refers to Section 29. Section 29 deals with the minimum/maximum coverage for contract vendees, and the rate for the policy, but does not establish any charge for the endorsement itself. The endorsement should logically appear in Section 25(A), with the leasehold endorsement and cooperative endorsement, both of which, like the contract vendee coverage, modify the owner’s policy to fit a different circumstance. The commentary to the 12/1/94 TIRSA submission to the Insurance Department indicates that the endorsement premium is the regular owner’s policy premium (which must mean that the appurtenant policy which is endorsed must be free!).