What is a Preliminary Title Report?

A preliminary title report (also known as a "title commitment") is a report issued by a title company after conducting a thorough title search to verify the current property owner has a clear chain of title and that there are no outstanding liens or other encumbrances on the property.

Why do this? Well, the buyer wants to be 100% certain that the person SELLING the property actually owns 100% of the property, and that no other parties have a claim to it.

Essentially, a preliminary title report is a list of any findings or issues that currently appear in a property’s title work and it includes a list of any liens or encumbrances that will not be covered by title insurance. The report also shows if anyone other than the seller has a legal claim to the property.

In a sense, the preliminary title report is a checklist of items the title company needs to receive before they can finalize and close a real estate transaction and issue the corresponding title insurance policy. It also represents the list of outstanding issues that cannot be covered by the title insurance policy.  Before a BUYER invests, it provides essential information such as the following.

  1. The legal description of the property. 
  2. Whether the seller has the right to sell the property. 
  3. The existence of any tax liens against the property.
  4. If the property is being used as collateral for a mortgage or other loan.
  5. Whether there are any other judgments or liens.
  6. Any CC&Rs (covenants, conditions, and restrictions) associated with the property.
  7. Any easements or rights-of-way associated with the property.
  8. Other unusual restrictions. Occasionally a property may be subject to special planning and zoning restrictions or subject to regulations (if it is located in a historic district, for example). These restrictions may affect how the buyer can use or develop the property.