After a buyer and seller have reached agreement, but before the close of escrow, the preliminary title report needs to be reviewed. The title report will reveal various liens, encroachments, easements, and anything else recorded against the property. The title company’s job is to compile the report, and this report is something that we believe is well worth understanding.
To help get your head around the legalese terminology involved in the report, check out these commonly used terms and phrases to help you better understand a Preliminary Title Report.
Estates: The word “estate” is used to express the degree, a fee quantity, nature, duration, or extent of an interest in land. A “Fee” is the highest type of estate or interest an owner can have in land, freely transferable, inheritable and whose owner is entitled to possession. (There are a number of other estates or interests in land that we can insure.)
Vesting: It is the ownership or title to an estate.
Legal Description: The description of the land covered by the preliminary report.
Exceptions: Matters which are expected from the property conveyed, such as oil and gas rights, or easements for specified purposes.
Taxes: The amount and status of past unpaid real estate taxes, if any, and current year’s taxes, paid or unpaid, or taxes which are a lien but not yet payable.
Bonds: Bonds or assessments, if any, levied at the inception of construction of improvements such as streets, gutters, sidewalks, etc.
CC&Rs: Covenants, conditions and restrictions are limitations sometimes put on the use and enjoyment of real property, such as limiting the property to a single family or to a one-story dwelling.
Easements: An easement is a right of use in favor of others in the land for specific purposes such as public utilities, roads, or ingress and egress.
Deed of Trust: A deed of trust conveys title to particular land to a neutral third party (trustee) with limited powers (such as power of sale) for the purpose of securing a loan (debt).
Assignment: An assignment of the beneficial interest under the deed of trust from one beneficiary to another.
Trustor: The borrower, owner and grantor of the property conveyed in a deed of trust.
Beneficiary: The lender on a deed of trust is referred to as the beneficiary.
Trustee: Is a neutral third party in the deed of trust with limited powers. When the loan is paid in full the property is reconveyed by the trustee back to the person or persons legally entitled to the land, or, if delinquent, the property will be conveyed pursuant to non-judicial foreclosure proceedings, to the highest bidder in a public sale.
Abstract of Judgment: Imposes alien on all real property owned or subsequently acquired by the debtor until satisfaction or expiration of the lien.
Statement of Information: This information statement is confidential and is used to enable the title company to eliminate title problems which may arise through similarity of the name of Seller or Buyer with the name of another person against whom there may be judgments, tax liens, or other matters affecting property ownership.
Our team at Fidelity Title Orange County has the knowledge to make sure that you secure the correct title policy for your specific needs and that your Preliminary Title Reports are accurate and delivered quickly. Contact your FNT Sales Executive today to learn more about our residential title services offered at FNT Orange County.