How to Read a Preliminary Title Report

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The result of this examination is the Preliminary Report that is prepared and sent to the customer. The report is issued before any policy of title insurance hence the name Preliminary Report.   Those matters shown in the report are as follows:   1. The estate or interest covered.   2. The vested owner of the estate or interest.   3. A description of the land involved.   4. Exceptions, liens, and encumbrances which affect the land at the date and time of the report. The Preliminary Report explained on the pages that follow is used by all members of the California Land Title Association. The investigation of title includes matters contained in the public records and, depending upon the type of final policy that is issued, certain offrecord matters. Note: There are certain matters which may affect title but may not be identified in the Preliminary Report. Top Top MECHANIC’S LIEN: A statutory lien in favor of persons contributing labor, material, supplies, etc. to a work of improvement upon real property. A release must be recorded to be removed. NOTICE OF ACTION: A lis pendens. A notice of a pending law suit recorded, that warns all persons that the property is the subject matter of a litigation. Any interest acquired during the pending of the suit are subject to it's outcome. A release and/or a withdrawal of the action is required to be recorded to remove. BANKRUPTCY: A proceeding in the U.S. Bankruptcy Court wherein assets of a debtor (unable or unwilling to pay debts) are applied by an officer of the court in satisfaction of a creditor’s claim. Debtor must be discharged or dismissed from the case. UNINSURED DEED: A deed that has been recorded but is believed to not have been checked as to its validity. Additional information may be needed before passing title. Call your title officer to see what might be needed in each case. ACCESS: A landowner’s right to have ingress to and egress from the property to a public street. This property does not have legal access. Top Title Order Number. (First American's identification number.) Name of person and company who requested the Preliminary Report. Address of the person that requested the Preliminary Report. (Escrow, Lender or Real Estate Agent) Customer reference number. (Escrow or loan number) Title Officer's name, telephone extension, and fax number. Our reference number, owner, buyer and address of property. This paragraph states that the Preliminary Report is in preparation for the issuance of a policy of title insurance, with no other liability unless specifically requested. It is a report only and not a title insurance policy. Top This is the effective date of our investigation of public record; the date and time, up to which, matters affecting the title have been examined. This sets forth the form of policy coverage that First American Title Company has been requested to issue. Vesting: This shows the vested record owner and how they hold title. Type of Estate:  (The word “estate” is used to describe the degree, quantity, nature, duration, or extent of an interest in land). A “fee” is the highest type of estate or interest an owner can have - freely transferable and inheritable, and whose owner is entitled to possession. Legal Description: Description of the property that is the subject of the Preliminary Report. Exceptions: Any transfer or encumbrance of this property will be subject to the matters following this paragraph unless the requirements to eliminate them have been met. Taxes: The first exception shown is a statement regarding the amount and status of the current year’s property taxes (e.g., taxes now a lien, now due, or respective installments paid or unpaid). Taxes for Fiscal Year 2003-2004, paid and due Lien for defaulted taxes Fiscal Year 2001-2002, delinquent Top Proposition 13 Exception: Addresses any Supplemental Tax bills that may be issued after the date of the Policy. a. Easements appearing affects the common area b. Recorded Easements: An easement is a right or interest of someone else in the subject land which entitles the holder thereof to some use, privilege, or benefit (e.g. to install poles and wires, pipe lines, roads or travel over, etc.) upon or over said land. Covenants, Conditions and Restrictions: Commonly referred to as “CC&Rs”, the term usually refers to a written recorded deed or declaration which sets forth certain rules and regulations established by a subdivider or other landowner to create a uniformity of buildings and use within tracts of land or group of lots. Deed of Trust: When recorded, conveys title to particular land to a neutral third party (TRUSTEE) with limited powers (such as powers of sale) for the purpose of securing a loan (debt) on real property. This is an assignment of the beneficiary's interest under the Deed of Trust Credit Line Deed of Trust: This (recorded) Deed of Trust is similar to the one shown as item 22 above except that it is not a true real estate loan, but was given as additional security for a line of credit that was extended to the Trustor. Notice of Default: The terms of the Deed of Trust were violated (e.g., failure to pay monthly installments) and, therefore, a Notice of Default was recorded to evidence commencement of foreclosure proceedings An Assessment Lien from the Homeowner's Association for delinquent Association dues. Top Federal Tax Lien: : A lien for unpaid Federal income tax. Imposes a lien on this and all other property now owned and hereafter acquired by the debtor until a release is recorded in the Official Records. Abstract of Judgment: An Abstract of Judgment imposes a lien on this and all other real property now owned or hereafter acquired by the debtor until the judgment is satisfied. This is disclosing a possible interest of the owners current or prior spouse. A requirement that First American be furnished with personal information (Statement of Information) about a party that is involved with the transaction. This allows us to discern whether there are additional liens/judgements that may attach to title. Lenders Supplemental Report: 24-month chain of title (Note I) and type of improvements located on the land (Note II) in preparation of the issuance of an ALTA Lenders title policy. Lender’s Information: On transactions involving a new loan by an institutional lender such as a bank, savings and loan, or mortgage company, a separate ALTA Lender’s Policy is required. This supplies that lender with assurances regarding the availability of a special lender’s endorsement and also gives the address and a brief description of improvements located on the subject property. It also satisfies the lender’s requirement that they be told of any transfers involving the subject property within the last two years which will provide information on how recently the current owner may have acquired title. Basis for Title Charges: Lets the escrow officer know the basis for the charges - whether it is a full rate or a partial (short-term) rate. Top Top Instructions to new lender if they are wiring funds to title. The Legal Description of the property in the Preliminary Report. Types: Lot/Map Condo Parcel Map Metes and Bounds Leaseholds A copy of the current Assessor’s Plat Map is provided at the end of this Preliminary Report to give the principals in the transaction an overview of the general shape of the subject property. Also included in the Plat Map are, certain dimensions that were either dedicated on the original map of the subdivision or created by legal descriptions contained in various deeds in the chain of title. Some deeds may have conveyed only specific portions of the original lot. Plotted easements can be requested. This map is not a survey of the land nor should it be relied upon for any purpose for which a survey would normally be required. 1. Assessor’s book number. 6. Recording information of tract. 2. Page number of assessor’s book. 7. Lot dimensions (in feet). 3. Assessor’s parcel number (APN) assigned to a specific lot. 8. Indicates lot dimensions equal to adjoining lots. 4. Lot number. 9. North/South indicator. 5. Map number.   Top 1. Assessor’s book number. 5. Map number. 2. Page number of assessor’s book. 6. Recording information of tract. 3. Assessor’s parcel number (APN) assigned to the specific lot. 7. Document number of condo plan. 4. Lot number.