How to Read a Title Commitment: Section-by-Section Breakdown
How to Read a Title Commitment: Section-by-Section Breakdown
When buying or refinancing a home, few documents are as important—or as confusing—as the title commitment. Many buyers skim it, assume it’s “standard,” and move on. That can be a costly mistake.
A title commitment outlines the conditions under which a title insurance company is willing to issue a title insurance policy. In simple terms, it tells you who owns the property, what must be cleared before closing, and what issues will remain after closing.
This guide provides a clear, section-by-section breakdown of a title commitment so you know exactly what you’re looking at—and what to question—before you sign.
What Is a Title Commitment?
A title commitment is a promise to insure title, not the insurance policy itself. It’s issued after a title search and before closing. Once all requirements are met and the transaction closes, the commitment becomes a title insurance policy.
Think of it as a roadmap:
What must happen before closing
What risks are already covered
What risks will not be covered?
Most title commitments follow a standardized format created by the American Land Title Association (ALTA).
The Three Main Parts of a Title Commitment
A title commitment is divided into three core sections:
Schedule A – Basic Information
Schedule B-1 – Requirements
Schedule B-2 – Exceptions
Understanding each section is key to protecting yourself as a buyer, seller, or lender.
Schedule A: The Snapshot of the Deal
Schedule A is the easiest section to read—and the most likely to be overlooked.
What Schedule A Includes:
Effective Date
The date and time through which the title search is valid. Anything recorded after this date may not be covered.Proposed Insured
This should list the buyer (and lender, if applicable). Errors here can cause policy issues later.Policy Amount
Usually matches the purchase price or loan amount.Property Description
This is the legal description, not just the street address. It must be accurate.
Why It Matters:
Mistakes in Schedule A can delay closing or result in incorrect coverage. Always verify names, amounts, and the legal description.
Schedule B-1: Requirements (Must Be Cleared Before Closing)
Schedule B-1 lists everything that must be resolved before the title company will issue the policy.
Common Schedule B-1 Items:
Payoff of existing mortgages
Recording of the new deed
Recording of the new mortgage
Proof of authority (trusts, estates, LLCs)
Payment of taxes or assessments
Correction of title defects
Key Tip:
These are not optional. If an item appears in Schedule B-1, it must be satisfied before closing can occur.
Red Flags to Watch:
Missing payoffs
Unreleased old mortgages
Estate or trust documentation delays
Judgments against the seller
Schedule B-2: Exceptions (What Title Insurance Will NOT Cover)
This is the most important—and most misunderstood—section.
Schedule B-2 lists exceptions to coverage, meaning these issues will remain on title after closing and are not insured against.
Common Schedule B-2 Exceptions:
Utility easements
Shared driveways
HOA covenants and restrictions
Mineral rights reservations
Setback or zoning issues
Survey matters
Why Exceptions Matter:
An easement could allow a utility company to access your yard. HOA restrictions could limit renovations. These are not defects—but they are limitations on ownership.
Can Exceptions Be Removed?
Some exceptions can be removed or modified, such as:
Survey exceptions (with a new survey)
Paid-off liens recorded incorrectly
Old restrictions that no longer apply
Others are permanent and must be accepted.
Standard vs. Special Exceptions
Standard Exceptions
These appear on most commitments and often include:
Rights of parties in possession
Survey discrepancies
Unrecorded easements
Some of these can be removed with additional documentation or endorsements.
Special Exceptions
These are property-specific and deserve close attention:
Recorded easements
Deed restrictions
Prior mineral reservations
Recorded judgments or liens
If you don’t understand a special exception, ask before closing.
The Legal Description: Don’t Skip This
The legal description is usually attached as Exhibit A. This defines the exact boundaries of the property.
Why It’s Critical:
Street addresses can change.
Legal descriptions do not.
Errors here can affect ownership rights.
If the legal description doesn’t match what you believe you’re buying, stop and investigate.
Endorsements: Optional but Powerful
Endorsements modify or expand title insurance coverage.
Common Endorsements:
ALTA 9 (Restrictions, Encroachments, Minerals)
Survey Endorsements
Access Endorsements
Planned Unit Development (PUD) Endorsements
Lenders often require endorsements, but buyers can request them too for added protection.
Who Should Review the Title Commitment?
Ideally:
Buyer
Seller
Real estate agent
Lender
Title officer
Real estate attorney (recommended)
Never assume “someone else” reviewed it.
Questions to Ask Before Closing
Are all Schedule B-1 items satisfied?
Do I understand every Schedule B-2 exception?
Can any exceptions be removed or insured over?
Does the legal description match the property?
Are my name and policy amount correct?
Asking these questions early prevents last-minute delays.
Final Thoughts
A title commitment isn’t just paperwork—it’s a risk disclosure document. Understanding it empowers you to avoid surprises, protect your investment, and close with confidence.
If you’re unsure about any section, don’t guess. Ask your title professional for clarification. A few minutes of review now can prevent years of headaches later.
Learn more about our comprehensive title insurance services here.
Thank you for reading! If you enjoyed this article and want to explore more content on similar topics, check out our other blogs at Sonic Loans, Sonic Realty, and Sonic Title. We have a wealth of information designed to help you navigate the world of real estate and finance. Happy reading!