What Is a Preliminary Report?

A Preliminary Title Report is a dated formal report that sets out in detail the conditions under which a policy of title insurance would be issued on a particular parcel of land. Its sole purpose is to facilitate the issuance of the policy.

Within a short time after a title order has been opened, the matters of record relative to the issuance of the title insurance policy on the subject property have been assembled in the title search and examined by skilled technicians. This is the time when the Preliminary Report is prepared and sent to the customer. The report reflects the matters which would be shown as exceptions in a policy of title insurance so that the parties to the transaction will be aware of any of those matters of record that may need to be cleared prior to the closing of the transaction. This report is issued before the title policy — hence the name Preliminary Title Report.

Those matters shown in the report are as follows:

• The estate or interest covered
• The recorded owner of the estate or interest
• A legal description of the parcel of land covered
• Requirements and Notes
• The easements, liens, encumbrances and other matters which affect the title to the land at the date and time of the report

The investigation of title includes matters contained in the public records and, depending upon the type of final policy that is issued, certain off record matters that may be disclosed by an inspection of the subject property.

What to look for in your Preliminary Report

1. Owner’s Name: Are the names the same as shown on the Purchase Agreement/Deposit Receipt? Have all parties executed and approved the Deposit Receipt?
2. Type of Estate or Interest: Fee title or other (Leasehold or Equitable)
3. Printed Exceptions: Current taxes, supplemental taxes (due to recent reassessment), lien for future supplemental taxes, sale to State for unpaid delinquent taxes/bonds.
4. Easements: Understand the type and location of all easements.
5. Covenants, Conditions and Restrictions: Declaration by owners of any subdivisions prior to sale describing property restrictions and agreements affecting said property and future owner’s.
6. Deeds of Trust: All existing loans against the property or the existence of any paid–off loans which have not yet been reconveyed of record.
7. Notice of Default: Alerts all parties of an existing foreclosure proceeding.
8. State or Federal Tax Liens, Judgements, Bankruptcy or other court proceedings affecting the seller and/or the property.
9. Legal Description: A method of geographically identifying a parcel of land, by lot and block or metes and bounds. Also discloses assessors parcel number.