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<p>My concern would still be the ability to get coverage when your
client wants to sell. For all we know the same title insurance
company currently has a policy covering the builder's lender, so
maybe they don't consider this an additional risk at this point.
If that's the case then their willingness to accommodate you now
would be entirely expected. Even if the standard policy language
would cover it now, you don't know it would in the future.<br>
</p>
<p>Also, I don't think you can totally ignore the fact that you have
a known claim here but by the time the issue becomes contested the
title company might be insolvent, or perhaps more likely the issue
I mentioned before that there might be other lien claims taken
against the property since this is new construction, reducing the
amount of coverage still available.<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 3/23/2018 10:12 AM, marc
holmeslawgroup.com wrote:<br>
</div>
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<div class="WordSection1">
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">The title company has offered the
following endorsement which seems to address the primary
concern. The last sentence says the express terms of the
endorsement controls over other inconsistent provisions of
the policy so that seems to address the concern about prior
knowledge of the insured.
<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">I have just asked what coverage limits
and deductibles would apply to a claim covered by this
endorsement and if and how the restrictive language in it
would apply to a hypothetical where the house is destroyed
in a fire and a neighbor seeks to enforce the covenant to
prevent it being rebuilt as a 3 story house.<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">Assuming those answers are acceptable,
does this seem like adequate assurance of coverage? Anything
else to be concerned about?<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"><img
style="width:10.6041in;height:3.3437in"
id="Picture_x0020_1"
src="cid:part1.D80B3C90.FDE5CA3C@comcast.net" class=""
height="321" width="1018"></span><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"><o:p></o:p></span></p>
<div>
<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">HolmesLawGroup.com</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">marc@holmeslawgroup.com</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>
</div>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"><o:p> </o:p></span></p>
<div>
<div style="border:none;border-top:solid #E1E1E1
1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b>From:</b>
<a class="moz-txt-link-abbreviated" href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a>
<a class="moz-txt-link-rfc2396E" href="mailto:wsbarp-bounces@lists.wsbarppt.com"><wsbarp-bounces@lists.wsbarppt.com></a>
<b>On Behalf Of </b>Gregory L. Ursich<br>
<b>Sent:</b> Tuesday, March 20, 2018 5:09 PM<br>
<b>To:</b> WSBA Real Property Listserv
<a class="moz-txt-link-rfc2396E" href="mailto:wsbarp@lists.wsbarppt.com"><wsbarp@lists.wsbarppt.com></a><br>
<b>Cc:</b> kim walawrealty.com <a class="moz-txt-link-rfc2396E" href="mailto:kim@walawrealty.com"><kim@walawrealty.com></a><br>
<b>Subject:</b> Re: [WSBARP] 3 story house meets 2 story
CCR restriction<o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal" style="margin-bottom:12.0pt">Marc: The
Title policy will not protect the new homeowner if they buy
with knowledge of the violation. One of the main exclusions of
a title policy is that any known condition to the buyer is
excluded from coverage. -Greg Ursich, Inslee Best<o:p></o:p></p>
<div id="AppleMailSignature">
<p class="MsoNormal">Sent from my iPhone<o:p></o:p></p>
</div>
<div>
<p class="MsoNormal" style="margin-bottom:12.0pt"><br>
On Mar 20, 2018, at 2:50 PM, marc <a
href="http://holmeslawgroup.com" moz-do-not-send="true">holmeslawgroup.com</a>
<<a href="mailto:marc@holmeslawgroup.com"
moz-do-not-send="true">marc@holmeslawgroup.com</a>>
wrote:<o:p></o:p></p>
</div>
<blockquote style="margin-top:5.0pt;margin-bottom:5.0pt">
<div>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Thank you all for the detailed
responses both on and off list. The CCRs are from the
40s and did create the functional equivalent of an
Architectural Control Committee but our working
assumption is that it and the HOA generally have been
defunct for many years. We’re trying to confirm this
but it’s not the end of the story either way as the CCRs
very clearly give all lot owners the right to enforce
the CCRs in a private action.</span><o:p></o:p></p>
<div>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"> </span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Some asked about the stories of the
house in question. The third floor contains multiple
bedrooms and bathrooms and a court order to remove it
would be devastating to the property. I haven’t
visited the site yet but from the listing photos it
seems pretty clear that the 1<sup>st</sup> floor is
built on grade with very little if not zero below
grade. The MLS listing calls it a “Multi-Level” home
and the available options they had to choose from were
2 story with basement, tri-level, or multi-level.</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Arguing it is not a 3 story house
seems ill advised to say the least.</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"> </span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">As for the 22T, yes we have one and
have given notice of disapproval. Now we’re trying to
figure out if there’s a reasonable way forward or if
it’s time to take our ball and go find another home.
Unfortunately, it appears to be the latter.</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"> </span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"> </span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"> </span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"> </span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Marc Holmes</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Holmes Law Group PLLC</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">2303 W. Commodore Way, # 306</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Seattle WA 98199</span><o:p></o:p></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">HolmesLawGroup.com</a></span><o:p></o:p></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">marc@holmeslawgroup.com</a></span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Ofc: 206-357-4224</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Cell: 206-849-0853</span><o:p></o:p></p>
</div>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"> </span><o:p></o:p></p>
<div>
<div style="border:none;border-top:solid #E1E1E1
1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b>From:</b> <a
href="mailto:wsbarp-bounces@lists.wsbarppt.com"
moz-do-not-send="true">
wsbarp-bounces@lists.wsbarppt.com</a> <<a
href="mailto:wsbarp-bounces@lists.wsbarppt.com"
moz-do-not-send="true">wsbarp-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>John McCrady<br>
<b>Sent:</b> Tuesday, March 20, 2018 1:01 PM<br>
<b>To:</b> WSBA Real Property Listserv <<a
href="mailto:wsbarp@lists.wsbarppt.com"
moz-do-not-send="true">wsbarp@lists.wsbarppt.com</a>><br>
<b>Subject:</b> Re: [WSBARP] 3 story house meets 2
story CCR restriction<o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">Beware of
Item 4 of the Exclusions:</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D"> </span><o:p></o:p></p>
<p class="MsoNormal"
style="mso-margin-top-alt:auto;margin-bottom:12.0pt;margin-left:.5in;line-height:15.0pt"><span
style="font-size:10.5pt;font-family:HelveticaNeueETW01-55Rg;color:black">Risks:</span><o:p></o:p></p>
<p class="MsoNormal"
style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;margin-left:.5in;line-height:15.0pt"><span
style="font-size:10.5pt;font-family:HelveticaNeueETW01-55Rg;color:black">a.
that are created, allowed, or agreed to by You, whether
or not they are recorded in the Public Records;
<br>
b. that are Known to You at the Policy Date, but not to
Us, unless they are recorded in the Public Records at
the Policy Date;
<br>
c. that result in no loss to You; or <br>
d. that first occur after the Policy Date - this does
not limit the coverage described in Covered Risk 7,
8.e., 25, 26, 27 or 28.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">I would
probably want to request affirmative coverage against
that matter.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D"> </span><o:p></o:p></p>
<div>
<p class="MsoNormal"><span style="color:#1F497D">John
McCrady</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">Counsel</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">Puget
Sound Title Company</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">5350
Orchard Street West</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">University
Place WA 98467</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">253-476-5721</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D"><a
href="mailto:j.mccrady@pstitle.com"
moz-do-not-send="true">j.mccrady@pstitle.com</a></span><o:p></o:p></p>
</div>
<p class="MsoNormal"><span style="color:#1F497D"> </span><o:p></o:p></p>
<div>
<div style="border:none;border-top:solid #E1E1E1
1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b>From:</b> <a
href="mailto:wsbarp-bounces@lists.wsbarppt.com"
moz-do-not-send="true">
wsbarp-bounces@lists.wsbarppt.com</a> [<a
href="mailto:wsbarp-bounces@lists.wsbarppt.com"
moz-do-not-send="true">mailto:wsbarp-bounces@lists.wsbarppt.com</a>]
<b>On Behalf Of </b>marc <a
href="http://holmeslawgroup.com"
moz-do-not-send="true">holmeslawgroup.com</a><br>
<b>Sent:</b> Tuesday, March 20, 2018 11:27 AM<br>
<b>To:</b> WSBA Real Property Listserv <<a
href="mailto:wsbarp@lists.wsbarppt.com"
moz-do-not-send="true">wsbarp@lists.wsbarppt.com</a>><br>
<b>Cc:</b> kim <a href="http://holmeslawgroup.com"
moz-do-not-send="true">holmeslawgroup.com</a> <<a
href="mailto:kim@holmeslawgroup.com"
moz-do-not-send="true">kim@holmeslawgroup.com</a>><br>
<b>Subject:</b> [WSBARP] 3 story house meets 2 story
CCR restriction<o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"> <o:p></o:p></p>
<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:
</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">
</span><o:p></o:p></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:
</span><o:p></o:p></p>
<ol style="margin-top:0in" start="1" type="a">
<li class="MsoNormal" style="margin-left:.25in;mso-list:l0
level1 lfo3"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Any obligation to perform
maintenance or repair on the Land; or
</span><o:p></o:p></li>
<li class="MsoNormal" style="margin-left:.25in;mso-list:l0
level1 lfo3"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Environmental protection of any
kind, including hazardous or toxic conditions or
substances.
</span><o:p></o:p></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. </span>
<o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">
</span><o:p></o:p></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?
</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">
</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">
</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">
</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Marc Holmes
</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Holmes Law Group PLLC
</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">2303 W. Commodore Way, # 306
</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Seattle WA 98199
</span><o:p></o:p></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">HolmesLawGroup.com</a><span
style="color:#1F497D">
</span></span><o:p></o:p></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">marc@holmeslawgroup.com</a><span
style="color:#1F497D">
</span></span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Ofc: 206-357-4224
</span><o:p></o:p></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif">Cell: 206-849-0853
</span><o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
</div>
</blockquote>
<blockquote style="margin-top:5.0pt;margin-bottom:5.0pt">
<div>
<p class="MsoNormal">_______________________________________________<br>
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</div>
</blockquote>
</div>
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