Glossary of Endorsements

ENDORSEMENT FORM 102.4

Provides lender with assurance that the foundations of structures under construction are within the boundaries of the security land, and that their location does not violate particular covenants, conditions and restrictions.


Endorsement Form 102.4 when attached to a construction lender’s policy after completion of the foundation of the improvement under construction on the security land, additionally provides that lender with assurance that such foundation does not encroach upon other lands, and that its location on the security land does not violate the provisions of any covenants, conditions and restrictions shown or referred to in that lender’s policy (which may, for example, provide for front and/or side yard setbacks).

The coverage of this Endorsement Form 102.4 is frequently requested by construction lenders as interim assurance that any loan policy which may be contemplated for issuance after completion of the entire work of improvement will be issued without qualification as to the location of structures. If, currently, by reason of the location of the foundation, the coverage of Endorsement Form 102.4 cannot be issued, it is probable that the coverage of Endorsement Form 100 (which is customarily requested in connection with the issuance of any such loan policy), at least as to encroachments upon other land (paragraphs 1c and 4) and/or restriction violations (paragraphs 1a and 1b), would also have to be curtailed in any future issuance.

To the extent that the costs of conforming to avoid encroachments and to comply with extant restrictions would be substantially greater after completion of the entire structure, those costs would be mitigated if the problems, if any, could be resolved prior to that time.

The use of the endorsement is not appropriate without modification where a blanket construction loan covers a tract development and the foundations on part of the security land are completed (e.g., deed of trust and policy describe Lots 1 to 100; coverage requested for Lot 5 only).