What shows up in a title commitment, and what are Schedule B exceptions?

Question

Turnrow Capital · Accepted Answer

A title commitment is the title company's offer to insure, issued days after escrow opens. Schedule A states who owns the land, the legal description, and the policy amount; Schedule B-I lists requirements to close (payoffs, releases, deeds); Schedule B-II lists exceptions — everything the policy will NOT cover. B-II is where you should spend your reading time.

Typical B-II exceptions on farmland: current taxes and assessments, recorded easements (each with a recording reference you can pull and read), mineral reservations, irrigation district rights, road rights-of-way, oil and gas leases, CC&Rs, and the standard preprinted exceptions — survey matters, parties in possession, unrecorded liens. Each numbered exception is a specific risk the insurer is declining.

Work the list actively. Order copies of every recorded document excepted — the title company provides them — and map easements onto an aerial. Then negotiate: standard exceptions can often be removed with an ALTA survey and a seller's affidavit; stale exceptions (an easement to a railroad gone for 60 years) can sometimes be deleted on request; requirements in B-I tell you exactly what the seller must cure.

The commitment is also your early-warning system: a B-I requirement for a deed from a deceased owner's estate, or a B-II exception for a contested lien, tells you weeks before closing that this deal has homework. Read the commitment within days of receiving it, and route anything unusual to a real estate attorney.