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The Processing of a Preliminary Report
A preliminary report is designed to facilitate
the issuance of a particular type of policy. The preliminary report identifies
the title to the estate or interest in the described land. It also contains a
list of defects, liens and encumbrances and restrictions which would be
excluded from coverage if the requested policy were to be issued as of the date
of the report, together with a disclosure of selected policy boilerplate
provisions attached as an exhibit to each report.
A Realtor® will
often obtain a copy of the preliminary report in order to discuss the matters
set forth in it with his or her clients. Thus, a preliminary report provides
the opportunity to seek the removal of items referred in the report which are
objectionable to the prospective insured. Such arrangements can be made with
the assistance of the escrow company.
Preliminary reports are furnished in
connection with an application for title insurance and are offers to issue a
title policy subject to the stated exceptions set forth in the reports and such
other matters as may be incorporated by reference therein. The reports are not
abstracts of title, nor are any of the rights, duties or responsibilities
applicable to the preparation and issuance of an abstract of title applicable
to the issuance of any report. Any such report shall not be construed as, or
constitute a representation as to the condition of title to real property, but
shall constitute a statement of the terms and conditions upon which the issuer
is willing to issue its title policy, if such offer is accepted.
Preliminary reports are furnished in
connection with an application for title insurance and are offers to issue a
title policy subject to the stated exceptions set forth in the reports and such
other matters as may be incorporated by reference therein. The reports are not
abstracts of title, nor are any of the rights, duties or responsibilities
applicable to the preparation and issuance of an abstract of title applicable
to the issuance of any report. Any such report shall not be construed as, or
constitute a representation as to the condition of title to real property, but
shall constitute a statement of the terms and conditions upon which the issuer
is willing to issue its title policy, if such offer is accepted.
The Purpose of a Preliminary Report
A. To show in written form the
following:
- Ownership
- Estate
- Legal Description
- Tax and Bond Information
- Easements and CC&R's
- Defects in title and requirements
- Trust Deeds (loans)
- Personal recorded liens on buyers and sellers
B. Used by buyers and sellers to consummate
an escrow
C. Used as a preview of our Title
Policy
The Processing of a Preliminary Report
A. Searching of Title (gathering
information):
- Verify legal and address to make sure we are searching
the correct property.
- Start at the last point of insurance we have (starter.)
- Run a complete chain of title on P.I.Q. (property in
question) from our last starter date to today. The items covered by this part
of the search are items 1,2,3,5,7 in category #1.
- Use of our back up system (Grantor/Grantee) when any
flaws or breaks appear in the chain of title.
- Run the buyers, sellers and former owners on the General
Index for recorded personal liens.
- Attach a map identifying our property.
B. Examination of Title
- Review everything in title search.
- Examine the documents in chain of title for:
a.
Execution and signatures.
b. Possible forgeries.
- Prepare the items to be shown in the report by using our
computer coding system.
- Set for the any conditions which will need to be met
before we can issue a policy of title insurance.
- Send to typist with complete write-up (instructions) as
to what is to be shown in the report.
C. Typing and Proofing
The report is typed in to our disc retrieval
system. This will store information on a memory system for use in producing our
title policy at a later date. The typed report is then reviewed by another
person for accuracy and returned to the title unit.
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