What is Florida form 9? Read this post to understand the importance of this form and its necessity for mortgage approval.

Form 9 or Florida Form 9, is a type of endorsement that allows title companies to issue insurance policies to safeguard the lender against loss or damage resulting from violations of the deed restrictions, encroachments, and set back lines existing as of the date of the policy. 

These issues, if present, are usually revealed after a property inspection has been carried out by a professional. 

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After form 9 is received, the lender can be sure of the fact that no illegal changes, such as encroachment into the neighbor’s property, or an easement, or other similar changes have been made by the property owner. This is why Form 9 serves as an important document to issue a lender’s title policy that the lender can rely on and approve the mortgage. 

Overall, Form 9 can cost you around $250 for a mortgage of $500k. Generally, it stays around $120-$140 for properties ranging from 200k-300k.

Before we dive more into this, you might want to familiarize yourself with a few terminologies that frequently appear in the form.

What are some terms important to understanding Form 9?

  • Encroachment. A situation in real estate where a property owner violates the property rights of his neighbor by building on or extending a structure to the neighbor's land or property intentionally or otherwise
  • Easement. An easement is a non-possessory right to use and/or enter onto the real property of another without possessing it. 
  • Loan Covenant. A loan covenant is a condition that requires the borrower to fulfill certain conditions or which forbids the borrower from undertaking certain actions.  
  • Improvement. Improvements to real property are generally developments of land or structures on the property that do more than merely replace, repair, or restore the original condition
  • Set back lines. The distance of a house or structure must be from the front, side, and rear property lines. Setbacks allow for access to underground utilities and distance between properties.

encroachment-types-real-estate

Now that we are familiar with the technical terms used in Form 9 let’s get deeper into the sections of the form and what they really mean. 

Form 9 can be divided into 5 different sections. Let’s take one section at a time and explain. 

SECTION 1 - General Conditions of the Insurance

The first part of the form says that the policy is issued against loss and damage when the insured mortgage can be divested, extinguished or its enforceability and validity are damaged due to covenants, restrictions, or conditions.

It also states that the insurance is issued against existing discrepancies pertaining to enforceable covenants, conditions, restrictions, existing improvements on the land, etc. that violate setback lines as appears in public records. The same conditions also apply to similar conditions in schedule B (if listed). 

Additionally, the policy also safeguards against conditions that establish easement on the land, provides a lien for liquidated damages, provides for an option to purchase, a private charge or assessment, and much more. 

The first part also safeguards the lender against encroachment into the adjoining land and on the land along with encroachment into the existing improvements into adjoining land and on land. It also protects against any notices issued due to violation of covenants, restrictions relating to environmental protection, etc. 

The Company insured the owner of the indebtedness secured by the insured mortgage against loss or damage sustained by reason of:

  • The existence, at Date of Policy, of any of the following:
  • Covenants, conditions, or restrictions under which the lien of the insured mortgage can be divested, subordinated or extinguished, or its validity, priority, or enforceability impaired.
    • Unless expressly excepted in the Schedule B 
    • Present violations on the land of any enforceable covenants, conditions, or restrictions, or existing improvements on the land that violate any building setback lines shown on the plot of subdivision recorded or filed in the public records. 
    • Any instrument referred to in schedule B as containing covenants conditions or restrictions on the land that, in addition, (A) establishes an easement on the land, (B) provides a lien for liquidated damages, (C) provide a private charge for assessment, (D) provides for an option to purchase, a right of first refusal, for the prior approval of a future purchaser or occupant.
    • Any encroachment of existing improvements located on the Land onto adjoining land or any encroachment onto the land of existing improvements located on adjoining land.
    • Any encroachment of existing improvements located on the land onto the portion of the land subject to any easement except in schedule.
    • Any notices of violation of covenants condition or restrictions related to environmental protection recorded or filed in public records.

SECTION 2 - Protection Against Future Violations

The lender is also protected for future violations that may arise due to violations of existing covenants, conditions, restrictions that may happen before the acquisition of the title and may lead to invalidity, the unenforceability of the lien of the insured mortgage, or loss of title. 

SECTION 3 - Encroachment Due to Improvements

The 3rd part covers improvements such as laws, trees, and shrubs that are present or encroach upon the portion of the land in the current time as well as the future. 

SECTION 4 - Protection of Lender Against the Removal of Land

The lender is also protected against a court order or judgments that may require the removal of any land beside the land of any encroachment. 

Any final Court order or judgment requiring the removal from any land adjoining the land of any encroachment accepted in schedule B.

SECTION 5 - Right to Maintain Existing Improvement

The last part of the form implies that the lender is also protected against court judgments that deny the right to maintain an existing improvement due to violation of covenants or restrictions. 

Form 9 is an important document for the lender that safeguards them and takes the transaction forward. It is imperative to mortgage approval and often demanded during loan origination.