In this six-part series from Maverick, we will describe the process that a title company uses to ensure a buyer’s property’s title is clear for the issuance of a title insurance policy.
Part 3: The Title Report
It’s 4:30 on a Friday and Patty Purchaser’s attorney was ready to head home! He moved the mouse to close his email, a new email notification popped up. The Title Report for Patty Purchaser’s transaction arrived from The Title Agency! (A Title Report is a commitment from the Title Agency and its underwriters to insure property as long as requirements and conditions are met). This is important, so the attorney popped the document open!
Patty’s attorney flipped through the first few pages until he came to Schedule A. Not all reports were the same, but they did typically follow the same basic structure. On this page, he found the property address and “SBL”. (SBL is the Section, Block & Lot – also known as the Tax Map Number). This number appears on various documents such as tax bills and assessment rolls.
Patty’s name appeared under Proposed Insured as she would be purchasing title insurance to protect her investment. The property was noted to be vested in the Sally Seller Irrevocable Trust and the Source of Title showed that the Trust obtained title by virtue of a deed dated several years prior. Patty’s attorney made a note that he would need a Trustee’s Deed from Seller’s attorney.
The Schedule A Description took up the next page. It seemed to be a fairly clear “metes and bounds legal description” that could easily be attached or typed into the body of the Trustee’s Deed. (A metes and bounds legal description starts from a property’s beginning point and traces the outline of a property’s boundary lines until there is a closure).
Requirements for the transaction were laid out in Schedule B-1. There were standard requirements such as Photo IDs and a “rundown”. (A rundown is the process where the searcher goes back to review the records at the County Clerk’s Office to ensure nothing new has come up since the date of the commitment). Also noted, although not irregular, was the need for full consideration (or the statement of the full purchase price) within the Trustee’s Deed and proof that the Agreement of Trust remains in full force and effect.
Patty’s attorney let out a long sigh before he began to peruse Schedule B-2. If there were any major issues, this is where he’d find them. He saw a Utility Easement for the local electric company – no worries there. “Hmm.” He adjusted his glasses. There is a restriction that the property could only be used for residential purposes, along with a setback requirement. That shouldn’t be a problem, but he would make sure to tell Patty so that she was aware.
The Schedule of Mortgages sets out the open mortgage liens on the property and there were two on this property. The first lien listed was only ten years old. Patty’s attorney would expect a payoff letter from the seller’s attorney prior to closing. But the second lien was much older and did not list the current owner as the borrower. The seller’s attorney would likely have her client sign an ancient mortgage affidavit for that one.
Finally, Patty’s attorney reviewed the Tax Page which displayed all of the property information as well as the taxes owed and already paid on the property.
Patty would be very pleased to hear that with the addition of a few documents, title would be clear, and she could move toward closing!
Stay tuned and follow Maverick Title Services for this six-part series:
- Part 4: Clearing Title
- Part 5: The Closing Table
- Part 6: Delivery of Title
