HOW TO READ A TITLE INSURANCE COMMITMENT AND POLICY

 The commitment is prepared prior to the closing and is available for inspection by all parties.  We FAX a copy of the commitment to the lender and to the Buyer or Buyer’s Agent.  The commitment should always be included in the documents that the buyer receives at closing.  Here’s how to read it:

 There are three “Schedules” or topics.

Schedule A is a description of the coverage.  The effective date is the date and time through which we have searched the public records – it will be updated from time to time until the actual closing.  Check over the names, amounts and the legal description to make sure they are correct.

 Schedule B – Section 1 lists the requirements for issuing a policy.  Item 1 says the current owners must be paid the consideration and the mortgages must be satisfied.  Item 2 requires payment of all taxes that are due (if any).  Item 3 tells who must execute the deed and mortgage. 

If there are judgments or liens against the property, the property owners, or the proposed buyers, they will show up here.  Not all judgments that show up on the commitment are valid, but they must all be checked out.

Schedule B – Section 2 lists the items that will be excepted from the policy.  The first seven items are standard language that appears on all commitments many of them may be removed at the time of closing, especially if a current survey is available.

Also shown on Schedule B – Section 2 will be any platted setbacks, easements or restrictions of record.  Always look for these and make sure the Buyer is aware of anything that might adversely affect the property value of the Buyer’s intentions for the property.

 NOTE: Title insurance does not cover zoning matters; the setbacks described are those shown on plats or called for in the restrictions.