What is a Title Commitment?

St. Petersburg, FL - When you are in the process of buying a house, you and your Realtor are going to receive a copy of the title commitment before closing.

According to the standard Florida sales contract, there is a deadline by which you must be given this document with all it's exceptions. What exactly is a title commitment, and what do you need to look for on one when purchasing property?

A title commitment is a document that shows the current ownership and encumbrances of the specific property. It also details the requirements that are necessary to complete the transaction contemplated within the Contract, and shows exceptions (if any) from coverage that may ‘carry over’ to the final title policy for your specific property. It's also a promise (a ‘commitment’) to issue title insurance to the Buyer and the Buyer’s Lender (if a Lender is used) as long as all requirements are met.

Before we discuss the title commitment any further, let's make sure you understand what title insurance is. Title insurance protects buyers and their lenders against any problems with the title in a transfer of ownership. It's basically an insurance policy protecting the owner from any claims of ownership by other parties from the past. It does not protect you from any future title issues, but if someone claims some ownership or some type of financial interest in the property from before your policy's effective date (the date/time of the Deed being catalogued in the County's Public Records), the title insurance issuer (underwriter) has a duty to resolve the matter. There will typically be two separate policies when a buyer is using a mortgage to help purchase a property. One policy (the Owner’s Policy of Title Insurance) guarantees the buyer’s ownership, and the other policy (the Lender’s Policy of Title Insurance) protects the lender’s financial interest created by Note.

Before you close on your new property, you should get a copy of the title commitment. If you do not receive the title commitment, demand that it be delivered to you!

What do you need to look for on it? A title commitment comes in 3 parts.

Schedule A contains the parties involved, the commitment date, the policies to be issued, the amounts of those policies, and the legal description of the property.

  • You want to be careful to check the seller name(s) against what is listed on the sales contract. Make sure everyone involved has signed the contract.

  • Check the legal description of the property for any errors. Th