Commitment for owner’s title insurance policy
Title Commitment: What is it?
So you have closed the deal for a new home. Congratulations for it. After signing the purchase deal, the seller must have given you a bunch of papers in the name of title commitment which would have confused you. Right? Well, you do not have to worry about what is to be done with those papers as title commitment is nothing but a promise made by your title company to provide a little insurance for your newly owned property. It contains all those terms and conditions that are present in an actual insurance policy. So now you have double reasons to celebrate.
A mistake that many people do is that they do not review the title commitment. It is true the commitment for owner’s title insurance policy will cover title’s problems but not all of them. Infact, the title company will cover only those issues that is likely to come in the long run. It lists most of the exclusions as exceptions and when you encounter any of these exceptions, they will simply say that it is your responsibility and not theirs. Thus, home owners are advised to review the title commitment thoroughly so that you are prepared for the unexpected surprises or say exceptions as per your title company. Also, property owners have the provision to get certain exceptions removed if they are unpermitted. They can even ask the title insurer to provide you insurance against such exceptions. However, this has to be done within 30 days of receiving the title commitment.
Sample Template Preview
Commitment for owner’s title insurance policy.
1. Seller shall deliver or cause to be delivered to purchaser or purchaser’s agent, not less than five days prior to the time of closing, a title commitment for an owner’s title insurance policy issued by the _________ Title Insurance Company in the amount of the purchase price, covering title to the real estate on or after this date, showing title in the intended grantor subject only to (a) the general exceptions contained in the policy, (b) the title exceptions set forth above, and (c) title exceptions pertaining to liens or incumbrances of a definite or ascertainable amount which may be removed by the payment of money at the time of closing and which the seller may so remove at that time by using the funds to be paid upon the delivery of the deed (all of which are referred to in this agreement as the permitted exceptions). The title commitment shall be conclusive evidence of good title as shown in it as to all matters insured by the policy, subject only to the exceptions as stated in it. Seller also shall furnish purchaser an affidavit of title in customary form covering the date of closing and showing title in seller subject only to the permitted exceptions in foregoing items (b) and (c) and unpermitted exceptions, if any, as to which the title insurer commits to extend insurance in the manner specified in paragraph 2 below.
2. If the title commitment discloses unpermitted exceptions, seller shall have 30 days from the date of its delivery to have the exceptions removed from the commitment or to have the title insurer commit to insure against loss or damage that may be occasioned by such exceptions, and, in such event, the time of closing shall be 35 days after delivery of the commitment or the time specified in paragraph 5 on the front page of this agreement, whichever is later. If seller fails to have the exceptions removed, or in the alternative, to obtain the commitment for title insurance specified above as to such exceptions within the specified time, purchaser may terminate this contract or may elect, upon notice to seller within 10 days after the expiration of the 30-day period, to take title as it then is with the right to deduct from the purchase price liens or incumbrances of a definite or ascertainable amount. If purchaser does not so elect, this contract shall become null and void without further actions of the parties.
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