The commitment is a title insurance document and commits the company to insure. It reflects matters that appear on the record title as of the effective date and time, which may or may not appear in the final policy (i.e. mortgages, easements, liens, restrictions, etc.) as well as setting forth the requirements which must be met before the final policy is issued.
As soon as you receive the title commitment, carefully review the information on it. If you find any discrepancies contact me or the title company immediately.
- OWNER’S POLICY — Does the type of Owner’s Policy match what is marked on the contract?
- POLICY AMOUNT — Does it match the purchase price on the contract?
- BUYERS — Are the Buyers listed on the commitment the same as the parties who signed the contract? Are the names correct?
- SELLERS — Are the Sellers listed on the commitment the same as the parties who signed the contract?
- LEGAL DESCRIPTION — Does the legal description match what is on the contract?
This includes the REQUIREMENTS that must be met to close and issue policy. Carefully review for matters that are expected to be resolved before or at closing.
Possible requirements May include:
- POWER OF ATTORNEY — Are any of the parties using a POA to close?
- ENTITIES — Is the Seller or Buyer a Corporation, LLC or Partnership? Documentation such as Articles of Incorporation, Resolution of Corporate Authority and Partnership Agreements may be required in order to close.
- DECEASED VESTED OWNER — Proper administration of the estate of the deceased and/or appropriate documentation will be required.
- RELEASES — Deeds of trust/trust indentures, liens and judgements must be satisfied and released.
- ACCESS — If no record access is found, an easement may be required.
- LIEN WAIVERS — New construction transactions may require lien waivers for work and/or materials
This lists EXCEPTIONS to title. An exception is a specific item set forth that is not covered by the policy – something that is excluded from coverage.
- STANDARD EXCEPTIONS — Every commitment has standard or regional exceptions. The standard Owner’s Policy will not cover any defects in title, losses or claims, which fall within the standard exceptions. These exceptions may be removed on an extended coverage or homeowner’s policy for an additional fee and requirements.
- EXCEPTIONS — Specific exceptions that affect the subject property are listed after the standard exceptions on the commitment and may include taxes, covenants, conditions and restrictions (CC&Rs), easements, reservations, deeds of trust/trust indentures, mortgages, liens and/or judgements.
- Exceptions may be deleted or revised on the final policy. Examples: Payment of prior and current property taxes at closing will be amended to show paid current on final title policy and deeds of trust and mortgages paid at closing will be removed.
- Policy endorsements can provide added coverage for an additional fee.