In a real estate transaction, it is important to ensure that all of the appropriate steps are taken in order to give the buyer of the property marketable title at closing. Part of this process is ordering a title commitment from a title insurer. A title commitment is the title insurer’s promise that it will issue title insurance for the property after closing if certain conditions are met and subject to certain exceptions.
When a title commitment is received per the timing requirements of the purchase contract, it should not be ignored. There may be requirements listed on the title commitment to which the buyer needs to provide objection within a specific timeframe. Pursuant to the standard FAR/BAR contract, the buyer has only 5 days after receipt of the title commitment to object to any issues that render title unmarketable. If the buyer does not timely object, they may forever lose their ability to do so.
How does the buyer know what objections to make? Only a licensed attorney is qualified to review and provide a legal analysis of a title commitment, and most importantly, the documents constituting exceptions to title. Therefore, it is important to use the services of an experienced real estate attorney to review your title commitment and determine what items require objections. Additionally, your real estate attorney will be able to address and eliminate certain exceptions to your title policy. An exception to a policy is an item that is excluded from coverage. Certain exceptions can be eliminated by taking steps such as executing an affidavit or getting a boundary survey. If an exception can be removed, it is in the buyer’s best interest to do so as it ensures the most protection for the buyer’s title insurance policy.
If you have any questions about title commitments or title policies, we urge you to contact a real estate attorney.
Berlin Patten Ebling, PLLC
Article Authored by Jessica Stewart, Esq. firstname.lastname@example.org
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