Schedule “A” of the Title Commitment reflects all of the information that identifies the specifics of the proposed transaction. Information contained on Schedule “A” includes the effective date of the commitment, proposed amount of insurance, type of policy(ies) to be issued, the name of the proposed insured(s), the person(s) in whom title is currently vested, the estate or interest in land to be covered, and the legal description of the property to be insured.
Schedule “B” of the Title Commitment sets out the proposed exceptions from coverage. There are two types of exceptions: standard exceptions and special exceptions. Standard exceptions appear in every commitment, because they are part of the form promulgated by the Texas Department of Insurance. Special exceptions appear in commitments on an individual basis indicating specific matters that affect the particular property. Standard Exceptions are in Schedule B, Items 1-9, which include:
- B-1 Restrictive Covenants
- B-2 Area and Boundaries
- B-3 Community Property
- B-4 Water Rights
- B-5 Ad Valorem Taxes
- B-6 Terms of documents creating Insured interest
- B-7 Homestead Construction
- B-8 Subordinate Liens & Leases
- B-9 Exceptions applicable to Short Form Mortgagee Policy
Schedule B, item 10 sets out the specific exceptions from coverage affecting the proposed transaction. They are generally listed as 10.a, 10.b, etc. and address issues affecting the property. Some of these issues may be ‘fixable’ (e.g. certain easements, encroachments) and with proper documentation, removed from the commitment and ultimately, the policy. Others cannot be removed.
Schedule “C” of the Title Commitment sets out the requirements that must be met in order for the title agent to issue the title policy(ies), or they will be placed on Schedule “B” as exceptions to coverage on the title policy(ies). There are two types of requirements: standard requirements that are a part of the policy promulgated by the Texas Department of Insurance; and any additional requirements specifically added by the title company in order to insure the transaction.
Schedule “D” discloses three categories of information to all of the parties involved in the transaction:
- Disclosure of ownership and officers of the Underwriter and Agent.
- Disclosure of the estimated premium charges.
- Disclosure of any party receiving a portion of the premium for furnishing title evidence, examination, and/or closing the transaction.
In order for a title commitment to be considered complete, it must include the commitment jacket countersigned by the title agent, completed schedules A, B, C and D, as well as the Conditions and Stipulations. You should review your commitment carefully before your closing. You may wish to have an attorney review it with you.
People often ask, “Why do we need title insurance?” “How can a title failure occur?”
We have provided these calculators to help you estimate the financial impact of your contemplated transaction.
Everything from Title Quotes, to Seller Net Sheets and Buyer Estimates.