Many times an examination of title will reveal that there are restrictions
that encumber the property to be insured. These restrictions take many forms. Sometimes you will find a Declaration of Protective Covenants that sets
forth a number of restrictions. Other times a deed in the chain of title may establish a particular setback line or restrict the use of the property to single family dwellings. All restrictions, no matter how seemingly innocuous, must be included in Schedule B of the policy.
The actual terms of the restriction need not be set forth in Schedule B. It is sufficient to refer to the instrument creating the restriction as follows:
“Restrictions, covenants and conditions as set forth in an instrument dated _____________ and recorded with the ____________ Registry of Deeds in Book ______, Page ______.”
In most cases, lenders want affirmative insurance that such restrictions have not been violated and that future violations will not result in a forfeiture or reversion of title. This is in fact one of the assurances given in the Secondary Mortgage Market Endorsement. Before this affirmative coverage can be given, however, you must determine that in fact there have been no violations and that there is no possibility of reverter.
Provisions as to forfeiture or reversion can usually be determined by a reading of the instrument itself. In order to determine whether the restrictions have in fact been violated, it is often necessary to have an inspection of the premises performed, usually by a surveyor.
In some cases, it will not be possible to determine if restrictions have in fact been violated, yet by a reading of the instrument itself, you will know that there is no provision as to forfeiture or reversion. In such a case, you may add the following note after the restriction:
This policy affirmatively insures that a violation of the foregoing restriction will not result in a forfeiture or reversion of title.”
In all cases you are cautioned to review the restrictions thoroughly before offering any affirmative coverage.
SeeMassachusetts Conveyancers Association Title Standard No. 52 for rules relating to the extension of restrictions. See Mass. Gen. Laws, c. 184, §23A and Massachusetts Conveyancers Association Title Standard No. 52 for provisions relating to six (6) year statute of limitations applicable to violations of private building restrictions. See Mass. Gen. L. c. 184, §23 for provisions relating to enforcement of restrictions which are unlimited as to time. See Mass. Gen. L. c. 184, §27 for rules relating to enforcement of restrictions imposed after December 31, 1961 and Mass. Gen. L. c. 184, §28 for rules relating to enforcement of restrictions imposed before January 1, 1962.