Title Insurance is a policy of insurance that hopefully gives you some warm assurance that the property you are buying has clear title to transfer to you. Once the title has been reviewed by the title underwriter you will receive your policy of title insurance to review. You want to read every section carefully.
Schedule B – Requirements
This section itemizes out all the things that need to happen for the title company to close your transaction. Read these items over and contact your title officer to find out how you can get these items taken care of in a timely manner or if you have any questions about anything in this section or any section.
Schedule B – Exceptions
The exceptions section will delineate each item that the policy “excepts from coverage” unless “they are disposed of to the satisfaction of the title company”.
Please read this section very carefully. These are the items that are recorded against your property. Property ownership is like holding a bundle of sticks. The full bundle contains all the rights we have in our property. The exceptions found in Schedule B are the rights that have been removed from your ownership or are also known as “clouds on the title”. You will find in this section any liens, restrictions, CC and R’s, taxes that are owed and owing, rights of ways, easements, mineral rights (or lack of), possible assessments, lack of public access potentially and many more. The title company is insuring you against any claims to a right that come against the property later that are not disclosed in this report. In all my years of doing business, I have seen many strange and curious items come through on the title report.
I could write a book on some of the weirdest things I’ve seen. Suffice it to say, I highly advise having a Real Estate Attorney review your title report and advising you on its contents if you are concerned at all about anything in your report. They can potentially be of great value with some of their suggestions.
Click on the link below for more clarification and information on title insurance policies.
Please review section 6.2 of the Utah Real Estate Purchase Contract. This section is very clear about the type of title insurance that will be paid for by the seller for the buyer at the culmination of the sale. The descriptions should give you a good idea of what is covered and not covered by your title policy. The title report spells it out in more detail for the particular property you are purchasing.
The seller is required to purchase a policy for the buyer for coverage in the amount of the purchase price. The buyer is required to purchase a policy with a coverage amount that covers the loan amount for the lender if they are acquiring a loan.
If you have questions about anything in your policy, whether it is the exceptions, the requirements, the amount or the type of policy being issued or anything else, don’t hesitate to ask your Realtor, your title officer and/or a Real Estate Attorney.