Title Insurance Commitment Overview

Commitment for Title Insurance

• This document is an offer to issue one or more title insurance policies.
• Claims must be based solely in contract.
• This commitment is not an abstract of title, report of the condition of title, legal opinion, opinion of title, or other representation of the status of title.
• Procedures used to determine insurability of the title are proprietary to the Company, performed solely for the benefit of the Company, and create no extra contractual liability to any person, including a Proposed Insured.

Commitment to Issue Policy

• First American Title Insurance Company commits to issuing the Policy according to the terms and provisions of this Commitment.
• Commitment is effective upon entry of the specified dollar amount as the Proposed Policy Amount and the name of the Proposed Insured in Schedule A.
• Commitment terminates if all Schedule B, Part I-Requirements are not met within six months after the Commitment Date.

Commitment Conditions

• “Land” includes the land described in Schedule A and improvements that by law constitute real property, but does not include any property beyond the area described in Schedule A.
• “Mortgage” includes a mortgage, deed of trust, or other security instrument, including one evidenced by electronic means authorized by law.
• “Public Records” are records established under state statutes at the Commitment Date for imparting constructive notice of matters relating to real property to purchasers for value.
• The Company’s liability and obligation is limited by the Notice, Commitment to Issue Policy, Commitment Conditions, Schedule A, Schedule B, Part I—Requirements, and Schedule B, Part II—Exceptions.
• The Company’s liability under Commitment Condition 4 is limited to the Proposed Insured’s actual expense incurred in the interval between the Company’s delivery of the Commitment and the delivery of the amended Commitment.
• The Company’s liability shall not exceed the lesser of the Proposed Insured’s actual expense incurred in good faith or the Proposed Policy Amount.
• The Company will only have liability under Commitment Condition 4 if the Proposed Insured would not have incurred the expense had the Commitment included the added matter when the Commitment was first delivered to the Proposed Insured.
• In no event shall the Company be obligated to issue the Policy unless all of the Schedule B, Part I—Requirements have been met to the satisfaction of the Company.

Schedule A

• Commitment Date: May 16, 2019 at 5:00 PM.
• Policies to be issued: 2006 ALTA® Owner's Policy.
• Proposed Insured: IrishBulldog, LLC.
• Proposed Policy Amount: $265,000.00
• Estate or interest in the Land: FEE.
• Title is vested in: Lewis & Lahti Limited Partnership.

Schedule B, Part I - Requirements

• Proposed Insured must notify the Company in writing of the name of any party not referred to in this Commitment who will obtain an interest in the Land or who will make a loan on the Land.
• Documents satisfactory to the Company that convey the Title or create the Mortgage to be insured, or both, must be properly authorized, executed, delivered, and recorded in the Public Records.

Schedule B, Part II - Exceptions

• This Commitment does not republish any covenant, condition, restriction, or limitation contained in any document referred to in this Commitment to the extent that the specific covenant, condition, restriction, or limitation violates state or federal law based on race, color, religion, sex, sexual orientation, gender identity, handicap, familial status, or national origin.
• The Policy will not insure against loss or damage resulting from the terms and provisions of any lease or easement identified in Schedule A.
• Taxes for the year 2019 are not shown as existing liens in the records of the County Treasurer.
• The first installment of real estate taxes for the year 2018 in the amount of 484.98ispaid;thesecondinstallmentof484.98 is paid; the second installment of 484.98ispaid;thesecondinstallmentof484.97 was also paid.
• The terms and conditions of Resolution granted to the Historic Preservation Board for Historic Preservation are excepted.

Title Insurance Commitment

• A commitment for title insurance is prepared before issuing a Policy of Title Insurance that shows ownership of a specific parcel of land with liens and encumbrances.
• Commitment is a document that states the conditions under which a title company will issue a title insurance policy.
• Policy is an insurance contract that protects against losses due to title defects.
• Liens are financial claims against a property.
• Encumbrances are rights or interests that affect the ownership of a property.
• The Commitment for Title Insurance lists title defects, liens, and encumbrances that would be excluded from coverage in a subsequent title insurance policy.
• The commitment allows parties to a real estate transaction to review and discuss any objectionable items that may be excluded from coverage.
• The commitment can be used to seek the removal of objectionable items before purchase.
• The commitment is produced shortly after escrow is opened by the title company.

Recorded Matters

• Recorded matters relate to both the property and the parties involved in the transaction.
• Examples of recorded matters include:
  • Mortgages recorded against the property.
  • Parties to the transactions.
• Recorded matters are listed numerically as “exceptions” in the commitment.
• They remain exceptions from title insurance coverage unless eliminated or released prior to the transfer of title.

Key Points When Reading a Commitment

• You will be interested primarily in the extent of your ownership rights.
• This means:
  • Reviewing the ownership interest in the property you will be buying.
  • Reviewing any claims, restrictions, or interests of other people involved in the property.
• The commitment will note in a statement of vesting the degree, quantity, nature, and extent of the owner's interest in real property.
• The most common form of interest is "fee simple" or "fee," which is the highest type of interest an owner can have in land.
• Liens, restrictions, and interests of others that are being excluded from coverage will be listed numerically as “exceptions” in the commitment for title insurance.
  • They may be claims by creditors who have liens or liens for payment of taxes or assessments.
  • They may also be recorded restrictions which have been placed in a prior deed or contained in specific documents creating covenants, conditions, and restrictions (CC&Rs).
  • Interests of third parties are not uncommon and may include easements given by a prior owner which limits your use of the property.

Explore the essentials of title insurance commitment documents, including the specifics of the offer and the terms for policy issuance. Understand the implications of contract claims and the proprietary nature of title insurability. This quiz will guide you through the commitment conditions and requirements for title insurance.