Understanding Preliminary Reports
Will the Preliminary Report
disclose the complete condition of the title to a property?
No. It is important to note that the preliminary report is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land, but merely report the current ownership and matters that the title company will exclude from coverage if a title insurance policy should later be issued.
No. It is important to note that the preliminary report is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land, but merely report the current ownership and matters that the title company will exclude from coverage if a title insurance policy should later be issued.
Is a Preliminary Report the same thing as title insurance?
Definitely not. A preliminary report is an offer to insure, it is not a report of a complete history of recorded documents relating to the property. A preliminary report is a statement of terms and conditions of the offer to issue a title policy, not a representation as to the condition of title.
These distinctions are important for the following reasons: first, no contract or liability exists until the title insurance policy is issued; second, the title insurance policy is issued to a particular insured person and others cannot claim the benefit of the policy.
How do I go about clearing unwanted liens and encumbrances?
You will wish to carefully review the preliminary report. Should the title to the property be clouded, you, your escrow company and your agents will work with the seller and the seller’s agents to clear the unwanted liens and encumbrances prior to taking title.
Who can I turn to for further information regarding Preliminary Reports?
Your real estate agent and/or your attorney can help explain the preliminary report to you. Your escrow and title company can also be helpful the sources.
In conclusion, in a business which is directed at risk elimination, the efforts leading to the production of the preliminary report, which is designed to facilitate the issuance of a policy of title insurance, is perhaps the most important function undertaken.
For more information regarding selling or buying property in SoCal, call Tim.
Tim Brodowski, MBA, CNE, GRI, BPOR, CIEA, MilRes Spec
Call/Text Tim 858-354-2354
Email TimBro97@aol.com
www.TimBroHomes.us
BRE #01224576
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