The ALTA Leasehold Interest Endorsement Explained img

The ALTA Leasehold Interest Endorsement Explained

calender icon 1/11/2023    poster icon  Mark Goodman

There are a wide range of endorsements that can be incorporated into an owner’s title insurance policy, but many investors don’t know which policies apply to their specific situation. In this article, we are going to break down the ALTA leasehold interest endorsement and when it can be used in an owner’s policy of title insurance on a commercial property.

ALTA Endorsement 13 for Leasehold Interest

The ALTA Endorsement No. 13 is used for an OWNER’s Policy insuring a leasehold estate. The ALTA 13.1 is used for a LOAN Policy insuring a leasehold estate. The policy may insure additional interests as well. The Leasehold endorsements expressly include the value of improvements added by the tenant in the calculation of loss because of an eviction by reason of a matter insured against by the policy. In addition, the endorsements include reasonable costs incurred by the insured to secure a replacement leasehold equivalent to the insured leasehold estate. Eviction is defined to include lawful dispossession and deprivation of use because of an insured matter. This endorsement replaced the leasehold policies, which are no longer available. The insured leasehold interest must be memorialized of record, either by recording the Lease or a Memorandum thereof

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