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<p>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.
;-)</p>
<p>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?<br>
</p>
<p>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.<br>
</p>
<pre class="moz-signature" cols="72">Kary L. Krismer
John L. scott/KMS Renton
206 723-2148</pre>
<div class="moz-cite-prefix">On 3/20/2018 11:26 AM, marc
holmeslawgroup.com wrote:<br>
</div>
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<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">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:<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.25in"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">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:<o:p></o:p></span></p>
<ol style="margin-top:0in" start="1" type="a">
<li class="MsoListParagraph"
style="margin-left:.25in;mso-list:l0 level1 lfo1"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Any obligation to perform maintenance
or repair on the Land; or<o:p></o:p></span></li>
<li class="MsoListParagraph"
style="margin-left:.25in;mso-list:l0 level1 lfo1"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Environmental protection of any kind,
including hazardous or toxic conditions or substances.<o:p></o:p></span></li>
</ol>
<p class="MsoNormal" style="margin-left:.25in"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">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.<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">We’re not aware of any publicly recorded
notice of that the 3<sup>rd</sup> story is a violation.
Does this seem like adequate protection for the buyer or a
recipe for disaster?<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Marc Holmes<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Holmes Law Group PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">2303 W. Commodore Way, # 306<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Seattle WA 98199<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"><a href="http://holmeslawgroup.com/"
moz-do-not-send="true"><span style="color:blue">HolmesLawGroup.com</span></a><span
style="color:#1F497D"><o:p></o:p></span></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"><a href="mailto:marc@holmeslawgroup.com"
moz-do-not-send="true"><span style="color:blue">marc@holmeslawgroup.com</span></a><span
style="color:#1F497D"><o:p></o:p></span></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Ofc: 206-357-4224<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Cell: 206-849-0853<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
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