Exceptions from Coverage on Owner’s Policies
It is common for title commitments to contain exceptions from coverage for things that cannot be insured over unless satisfied or removed (ie: liens, restrictions, mortgages, etc.). In addition, there may be exceptions for items that are not of record such as an unrecorded easement that the title insurer would not have knowledge of since it would not be found in the county’s official land records.
Make sure when receiving a title commitment for your client that there are not “broad exceptions” from coverage. Generally speaking, these exceptions exclude any identification for building and use restrictions, easements, and right-of-ways. They usually are a result of a “shorty” search, meaning the title has not been examined back further than the last deed or two in the chain of title to the property. Common use of this practice is higher with foreclosure deals, especially when produced from out of your local area.
Note: No legal advice or suggestions are being given.
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