What Is a Title Commitment?
When buying a house in Texas, you are usually issued a title commitment within 20 days of going under contract.
What is a title commitment: A Title Commitment is a promise to issue title insurance. This means that if anyone should argue the legal ownership of your property, your title company will defend the title on your behalf.
For example, if the seller was married when they bought the property, and they sell without their former spouse knowing, the ex-spouse could have a right to the property that you just purchased. The title company researches the history of property, and issues title insurance to protect your investment. The policy can also cover things like boundary disputes and includes certain exceptions that are listed on the Commitment.
Here is a guide to help you read your title commitment:
Schedule A – “A” is for “Actual Facts”. This is the who, what, where, and how much of the transaction. This is where disclosure of the vested owner in the transaction will appear along with the legal description of the property. It will also show the proposed insured and the lender. If you see any discrepancies, you should raise them to the title company immediately.
Schedule B – “B” is for “Buyer Notification” of items in which other parties have some interest or control or the use of the property. This contains exceptions to the coverage and these are items that currently, and may always affect the property. Some examples are 1) Deed Restrictions, 2) Easements and 3) Building Lines. Copies of these exceptions are available for review.
Schedule C – “C” is for “Clear in order to CLOSE”. These items usually must be resolved in order to transfer title to a new owner. Some examples are: 1) Existing Liens, 2) Bankruptcies, 3) Abstract of Judgments, 4) Probate Issues, and 5) Vesting Problems.
Schedule D – “D” is for “Disclosure”. This is required regulatory disclosure of the ownership of the title insurance company, the costs of the policies being issued, and certain consumer protection notices.
Please do not hesitate to contact me with any further questions!