CATIC reports seeing a large spike in permit related claims in Vermont.
One problem area includes inconsistencies in the number of bedrooms vis-à-vis the seller’s listing, the contract, the assessor’s card, and/or state and municipal permits. Whether covered under the policy or not, this is an important issue for both the client and the lender so “the math” (getting a consistent count on bedrooms) must add up!
Additional claims scenarios involve: “seasonal” (unpermitted) properties being converted to year-round use; and offices issuing the wrong type of title insurance policy for “camp” properties. Remember that Expanded Protection policies should only be issued where the property is: 1-4 family, fully permitted for year-round use; and title is held by a natural person.
Yes, Expanded Protection policies do insure many permit related matters but, depending on the situation and the facts of the claim, not all permit related claims are covered under the policy. If a permit issue is not covered under the policy, it may leave the title attorney exposed to liability.
Please continue to exercise all due care when searching, and reporting on, the status of permits.