You should review and understand all the exceptions in the commitment to avoid any nasty surprises while you own the home.Merely reading the title commitment may not tell you everything you need to know. When the review is complete, if you are satisfied with the title and proceed to closing, you can almost set aside any worries to do with your home’s title insurance coverage. They might include exceptions for such things as taxes not shown by the public records, reservations in federal patents, utility service charges, navigation and water rights issues, and treaty rights.In addition to the standard exceptions that appear on any policy, the title company may list “special exceptions” for items found in its search of the public records that relate specifically to the insured property.These special exceptions will be listed after the standard exceptions in Schedule B, Section II of an ALTA title commitment. This is a negotiable item, but is often determined by custom in your area (each state, county, or city may have differences in who customarily pays).Although completing a thorough review of that bundle of papers called the “title commitment” can be a lot of work, it is definitely worthwhile. That lets you determine exactly where the boundaries are.
The title commitment comes before closing; the title policy is issued after closing. You (or your attorney) can request that the title company remove, modify, or provide coverage for certain exceptions.For example, the title company may remove or limit the general exception that excludes rights of parties in possession (i.e. For example, if an exception is listed for “the covenants recorded in 1992 at Book 333 Page 720,” you can obtain a copy of the actual written covenant agreement recorded at that book and page and read the covenants to understand what requirements they impose.In the case of a recorded easement, reviewing a copy of the easement agreement will tell you exactly who the easement benefits, where it is, and for what it can be used (for example, maybe the easement is for the public utility company to access the power lines on the southwest portion of the property). This means any liens, or disputes in property ownership must be resolved before the sale can even take place!When someone says “title commitment” they are talking about an offer to issue a title insurance policy upon closing if the outlined conditions in the document have been met. Boundary encroachments – for example, where a neighbor’s fence, shed, or landscaping extends onto your property, or vice versa – are more common than you might think.You should carefully review, or have your attorney review, the completed survey. These are provisions insuring certain exceptions. When someone says “title commitment” they are talking about an offer to issue a title insurance policy upon closing if the outlined conditions in the document have been met.
An easy way I ’ve found is to tell them to think of the title commitment as an offer to issue a title policy along with an overview of the important parts of the policy in question. Anything found that may pose a potential problem with the title to the property, impact its value, or affect your use of the property will likely show up on this list of special exceptions.As with the standard exceptions, if a problem relating to one of these excluded items crops up later, you cannot turn to the title company for help.
people living on the property), upon receipt of the seller’s affidavit stating that no other parties have a right of possession.Also, in some locations, the title company will remove or modify the general exception relating to matters a survey would show after you send it a recent survey of the property.If the title commitment contains exceptions for liens due to unpaid items, these, too, can usually be removed if you provide the title company with evidence that the liens have been paid off.You may be able to obtain additional protection regarding some exceptions by buying endorsements. While a plat map can show you the general location of the property, a property survey will contain more detailed information, including the location of improvements on the land, such as where the home, any outbuildings, or other permanent structures (such as fencing) exist.An accurate survey is also the most reliable way to locate any easements, encroachments, or boundary issues affecting the property. Most notably you’re likely to see an exception for the outstanding amount of seller’s mortgage, which will be paid off from the proceeds at closing.However, if there is an exception for a lien, perhaps for unpaid child support, and the title company hasn’t required that it be paid at closing, this is an issue you’d want to take steps to resolve, primarily because you want the seller to take care of any required payments rather than passing the responsibility to you along with the house. Some of these common title issues are: It’s important to review exceptions carefully so that any documents, and actions necessary are taken to remedy the problem in a timely manner to When you receive a title commitment for review, where do you even start?