The Title CommitmentBasics of Title Commitment when it comes to purchasing a warehouse property
When both parties execute the sales purchase contract, it will be delivered to the Title Company . Within about 20 days, the title company will issue what is called a title commitment. The title commitment is an agreement from the title company to issue a title policy based on the terms and conditions expressed in the commitment document. The only way to change the policy is to change the commitment. Changing or amendments to the policy would take place between the issuance of the title commitment and the closing of the property.
Changes In Title
Buyers must act quickly if they are going to want changes to the policy. Sometimes changes are free and not charged. An experienced buyer would know what to ask for , changes may come as an amendment or endorsement for an extra charge. The title commitment is separated into 4 sections.
Risks in Title
The title policy has a section called “covered risks” that is beneficial to buyers. It states that the title is vested in the person(s) or parties disclosed in Schedule A on the day the policy is issued. If a buyer has a economic loss or damage from an insured risk, the title company will pay up to the face value of the policy. However the damage or loss must happen before the policy is issued not after. Some of these important overages are:
Fraud, forgeries, duress, incompetency, incapacity, indexing of recorded documents or invalid powers of attorney.
- Schedule A- describes the key elements of the purchase transaction
- Schedule B- Buyers Beware lists the things that are not insured by the policy
- Schedule C- Cure for closing lists the conditions required for closing
- Schedule D- Disclosures , discloses the information regarding estimated premium costs and names of shareholders , directors and officers of the underwriting and title company. Also any party receiving a portion of the premiums for providing title evidence, examinations and or closing the transaction.