Title commitment
A title commitment is the insurer's written statement of the policy it is prepared to issue, and on what conditions.
It is the single most informative document in a property transaction and the one most reliably skimmed.
What is in it#
Schedule A. The basics — who currently holds title, what interest is being insured, the amount, the proposed insured, and the legal description.
Check the legal description against the deed. Errors here are rare and catastrophic.
Schedule B-I, requirements. Things that must be done before the policy issues. The seller's mortgage satisfied. A judgment lien released. Letters testamentary produced. An affidavit of identity supplied. Delinquent taxes paid.
Schedule B-II, exceptions. Matters the policy will not cover. Easements found in the search. Restrictive covenants. Mineral reservations. Survey matters where no survey was obtained. Standard exceptions the insurer applies generally.
Requirements are a to-do list#
Each one is something that has to happen, and each one has an owner.
A requirement nobody actioned surfaces the week of closing, and the parties discover that a satisfaction has to be obtained from a lender that merged out of existence, or that an heir has to sign something and cannot be located.
Working through the requirements as soon as the commitment arrives is what prevents a closing being delayed by a document that was always going to be needed.
Exceptions are the risk you are accepting#
The list of things the insurer already knows about and will not pay for.
Some are unremarkable — a utility easement along a boundary, standard subdivision covenants.
Some are not. A recorded access easement across the middle of a lot. A mineral reservation. A restriction on use that conflicts with the buyer's plans.
The buyer is agreeing to take the property subject to every one of them, and the commitment is where that agreement actually happens.
Removing exceptions#
Standard exceptions — mechanic's lien rights, parties in possession, survey matters — can frequently be removed by supplying a survey and an affidavit from the seller.
That is a normal request and it costs little. Whether it is worth doing depends on the property, and on a rural parcel or one with any boundary uncertainty it usually is.
Specific exceptions found in the record generally cannot be removed. The question becomes whether to proceed.
Get it early#
A commitment delivered the day before closing has technically been delivered and has practically removed any ability to act on it.
Ask for it as soon as it is produced, read the requirements and exceptions the same day, and raise questions while there is still time and leverage to resolve them.