The title commitment is one of the most important documents in a real estate transaction. However, most buyers have no idea what the title commitment means or what title insurance covers. The title commitment is a document issued by the closing attorney or title company that will be issuing title insurance to the after closing. The title commitment gives a detailed account of the ownership of, and liabilities associated with, that property, and it explains precisely what the title insurance policy will and will not cover, once it’s issued. Having your title commitment reviewed by an experienced real estate lawyer protects your interests and investment by making sure no surprises are lurking in the text of your title commitment.
Overview Of The Title Commitment
In addition to spelling out the requirements necessary to provide title insurance, the title commitment provides a detailed listed of any liens, obligations, or other burdens that may be attached to the title for the property, and limitations on the use of the property, like easements; existing leases; CC&Rs (covenants, conditions & restrictions, such as the rules of a homeowners’ association). The title commitment document addresses all of this information in three sections, called Schedules.
- Schedule A – Schedule A contains basic information about the real property and transaction: The purchaser and mortgage lender, legal description of the property, the effective date of proposed title insurance policy, along with the type of policy, coverage amounts and current title vesting (ownership).
- Schedule B-I – Schedule B-I lists all of the requirements that need to be met before the property title is considered marketable, and the insurance policy can be issued to the buyer (proposed insured). This might include things like the deed from seller to buyer, mortgage documentation between buyer and lender, satisfaction or release of any liens, corrective deeds from prior owners, or probate for a deceased owner.
- Schedule B-II – Schedule B-II specifies items that the title insurance policy will not cover: The exceptions. There are standard exceptions for issues like unrecorded easements, encroachment, rights of tenants who occupy the property, and municipal liens. There may also be property-specific exceptions for things like CC&Rs, recorded easements, or agreements with utilities.
Real Estate Lawyers Help You Deal With Those Requirements and Exceptions
An experienced real estate lawyer can help ensure you are aware of any issues in your title commitment that may delay closing and receive a title policy that best protects your interests.
Often they can also help you exercise your rights under the sales contract to require the Seller to resolve the title issues or have some of the listed exceptions covered by the title insurance policy. The real estate lawyers at Overstreet, Miles, Cumbie & Finkenbinder help buyers and sellers in Kissimmee, St. Cloud, and throughout Osceola County make fully informed choices for successful transactions. Give us a call at 407-847-5151 or contact us online to schedule a consultation and we’ll let you know how we can help you get what to expect from your real estate transaction, without unwelcome surprises.