Understanding A Commitment for Title Insurance

Definition: A Commitment is a contract to issue a title insurance policy upon meeting the requirements set forth in Schedule B-I, subject to the exceptions contained in Schedule B-II.

Transmittal Letter:

  • The Transmittal Letter lists the following information:
  • Case Number – the title company’s file number or reference number
  • Purported property address (not certified)
  • Schedule Number – the real estate tax schedule number
  • Buyers’ and Sellers’ names
  • Listing Agent’s name and address
  • Names and addresses of any additional parties who have received copies of the commitment
  • The name of the examiner who has prepared the commitment for the title company

Schedule A:

Schedule A sets forth the following information:

  • Effective date – the date to which the real estate records have been searched
  • Policy or Policies to be issued – the names of the proposed insured for any Owners and/or Loan Policies Amount – the proposed dollar amount of coverage per proposed insured Premium – dollar amount due to the title company as payment to issue policy/policies, including payments for endorsements to be attached to policy/policies
  • Property owner (of record to the effective date)
  • Legal description

Schedule B-I Requirements:

Schedule B-I sets forth the items that must be submitted to the title company to issue policy

Schedule B-II Exceptions:

Schedule B-II sets forth those matters affecting title to the property that are excluded from the coverage of the particular title insurance policy

Standard items of exception found on the commitment are as follows:

  • Rights or claims of parties not shown by public records
  • Easements not shown by public records
  • Discrepancies in area or boundary disputes
  • Liens not shown by public records
  • Gap period – period of time falling between the commitment effective date and the recording of the required instruments per Schedule B-I
  • Real property taxes

Non-standard items of exception that may be found on the commitment are as follows:

  • Mineral reservations
  • Oil and gas leases
  • Lack of access
  • Covenants, conditions and restrictions (with or without a reverter clause)
  • Easements of rights-of-way
  • A trust deed being assumed
  • Agreements of record