Title Insurance is like any other type of insurance. It is a policy that protects the ownership interest of the buyer (and lien interest of the lender) for anything that happened to or upon the property prior to the closing date. Title Insurance is also often misunderstood and under-appreciated by the buyer. The purpose of this blog entry is to explain the different sections of the title insurance commitment and policy.
The cover jacket of the commitment, both the front and back pages, inside and outside, describes what the title insurance policy will cover once issued, and also what is not covered or what is excluded from coverage.
Schedule A of the title insurance commitment describes:
- The Effective Date (typically, the last date searched by the title insurance company)
- The name of the Buyer and Lender
- The amount of coverage (typically the purchase price and loan amount)
- The current owner or seller
- The legal description of the property
Schedule B-I of the commitment describes all of the conditions that the title company must complete before it can issue the policy. Schedule B-I typically includes things like:
- Creating and recording a valid deed between Seller and Buyer
- Creating and recording a valid mortgage from the Buyer in favor of the Seller
- Verification that property taxes have been paid
- Affidavits or other items needed to cure any title issues
Schedule B-II of the commitment describes all of the exceptions or exclusions from coverage. These are the "pre-existing conditions" of the title insurance commitment and Schedule B-II contains things like:
- Easements for utilities, or access, or roadways
- Restrictions and reservations shown on the Plat of the neighborhood
- Restrictions, Rules and Regulations of any condominium or homeowner's association.
Title Insurance is a one-time premium charged when the buyer buys the house (and is paid by the buyer anytime the bank refinances the house). Title insurance can be confusing, but like other types of insurance is comforting to have when the need arises. Understanding the title insurance commitment, much like understanding your health insurance or car insurance, is beneficial to a soon-to-be homeowner.
For more information on title insurance, please subscribe to the Yesner Law Podcast, on iTunes and Stitcher. If you prefer, please contact us to schedule a free initial consultation to discuss your options at 813-774-5737 or email me directly at firstname.lastname@example.org.
Shawn M. Yesner, Esq., is the founder of Yesner Law, P.L., a Tampa-based boutique real estate and consumer law firm that helps clients eliminate debt by providing options, so they can live the lifestyle of their dreams. We assist clients with asset protection, the sale and purchase of real property, Chapter 7 liquidation, Chapter 13 reorganization, bankruptcy, foreclosure defense, debt settlement, landlord/tenant issues, short sales, and loan modifications in Tampa, Westchase, Odessa, Oldsmar, Palm Harbor, Clearwater, Pinellas Park, Largo, St. Petersburg, and throughout the greater Tampa Bay area.