Important Update on Memoranda of Homeowner Benefit Agreement

Dear Members,

Another short and sweet blog posting to bring something important and new to your attention.

Memorandum of Interests.  We have begun seeing documents called Memoranda of Homeowner Benefit Agreement or simply an Agreement, in the public records, which references a listing agreement between the homeowner and a real estate broker.  These agreements typically provide that the real estate broker will be the exclusive listing agent for the future sale of the homeowner’s property and shall be entitled to a commission upon the consummation of a sale.  Further, they assert a lien right for money owed to the real estate broker and purports to include a covenant running with the land that doesn’t expire for several decades.  Unsuspecting buyers have taken title subject to these agreements and received demand for payment after closing.  You will begin to see the following requirement in Schedule B1 when such an instrument has been recorded in your chain of title…..and has not been released and terminated.

Record satisfaction of all sums due and a full release and termination of all covenants, conditions or restrictions purporting to run with the land contained in that certain instrument duly recorded ________, in _O.R. BOOK______, PAGE_  ,Public Records of _(COUNTY), Florida.  Verify the authority of the person executing the satisfaction, release, and termination.

For insuring purposes, The Fund requires satisfaction and release of all amounts due under the agreement and termination of any covenants, conditions, or restrictions.  Should you have any questions regarding whether a release and termination is acceptable, please contact underwriting@thefund.com and provide a copy of the proposed release and termination.  I will be hosting a pop-up webinar in the coming weeks that will provide an in-depth discussion of the agreements and steps to follow to comply with insuring requirements.

Always something new, eh?

Let me know how we can help you.

Melissa Jay Murphy
Executive Vice President, Chief Legal Officer,
and General Counsel