If you’ve arrived at this article because you’re searching for the answer to a request made by your significant other, a) we’re sorry and b) we feel obligated to tell you that the content hereafter is not what you’re looking for. But it’s valuable nonetheless!
A title commitment is a contract between our underwriter (we are a title “agent” of an underwriter) and the proposed insured(s) (the owner for an owner’s policy and the lender for the lender’s policy) in which the underwriter promises (“commits”) to issue a title insurance policy or set of policies based on the payment of the premium and completion of the requirements. The “Completion of the requirements” is often referred to as “clearing title.”
What does that mean for you?
An easy way to understand a commitment (or our summary of the commitment) is to look at it as a roadmap to the closing table.
Schedule A is your transaction guide. It contains:
- The effective date (or the date through which the searcher was able to pull documents in the county recorder’s office).
- Policy or policies to be issued
- Name(s) of the proposed insured(s)
- Name(s) of the current owner(s) and the vesting information
- It sometimes also contains the legal description, though some commitments alternatively add a Schedule C instead.
Schedule B-1 contains the requirements to close. These are typically the items containing instructions and must be completed in order for closing to occur and policies to be issued. We thoroughly review the requirements in B-1, item by item, and make sure each is completed before we issue the “Approved to Schedule.” We will seldom remove a requirement completely from our commitment. Instead, we will “mark up” items in Schedule B-1 to show they have been addressed and will be removed from the final policy.
Schedule B-2 customarily contains the exceptions to policy coverage. These are the items that usually remain when converting the commitment to policy. This means that the proposed insured understands that they will NOT be covered for the liabilities represented by these exceptions. Often times the lender will require an endorsement to add additional coverage to cover these exceptions (example restrictions, encroachments).
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