[WSBARP] 3 story house meets 2 story CCR restriction

[Kary Krismer]

To answer, I think we'd need to know what's on the third floor. And how 
much your client likes being a defendant in litigation. ;-)

Seriously, I'd be worried about what the limits of coverage are, and the 
deductible.  I don't believe that coverage has a limitation lower than 
the sales price, but I don't know that for certain.  And what about the 
(unlikely?) event of some other claim against the policy, e.g. a lien 
claim, reducing the limits remaining for other claims?  It doe not seem 
like an ideal situation at all, and it's going to come up again when 
your client sells.  What will title policies provide at that point in time?

I'd be interested in others' opinions of whether a buyer would need to 
have had 22T in their offer to raise this issue with the seller.  I've 
seen very few situations where 22T is useful, but this seems like one of 
them.

Kary L. Krismer
John L. scott/KMS Renton
206 723-2148

On 3/20/2018 11:26 AM, marc holmeslawgroup.com wrote:
>
> We have a client set to buy a brand new 3 story house and, lo and 
> behold, the builder didn’t notice or ignored a CCR restriction 
> limiting homes to no more than 2 stories.  Title company says the ALTA 
> Homeowner’s policy covers this and points to a “covered risk” 
> provision that reads:
>
> You are forced to correct or remove an existing violation of any 
> covenant, condition or restriction affecting the Land, even if the 
> covenant, condition or restriction is excepted in Schedule B.  
> However, You are not covered for any violation that relates to:
>
>  1. Any obligation to perform maintenance or repair on the Land; or
>  2. Environmental protection of any kind, including hazardous or toxic
>     conditions or substances.
>
> unless there is a notice recorded in the Public records, describing 
> any part of the Land, claiming a violation exists.  Our liability for 
> this Covered Risk is limited to the extent of the violation stated in 
> that notice.
>
> We’re not aware of any publicly recorded notice of that the 3^rd story 
> is a violation. Does this seem like adequate protection for the buyer 
> or a recipe for disaster?
>
> Marc Holmes
>
> Holmes Law Group PLLC
>
> 2303 W. Commodore Way, # 306
>
> Seattle WA 98199
>
> HolmesLawGroup.com <http://holmeslawgroup.com/>
>
> marc at holmeslawgroup.com <mailto:marc at holmeslawgroup.com>
>
> Ofc: 206-357-4224
>
> Cell: 206-849-0853
>
>
>
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