Commitment for Title Insurance

What is Commitment for title insurance?

This is the commitment of the owner of the property to the buyer in order to assure the buyer of the ownership of the property. This commitment is given prior to the closing or on the day of closing and is open to scrutiny. The buyer can talk to his or her attorney or the title company or even to their agent regarding any type of question or doubt that may arise in their mind regarding the commitment or the title per se.

The buyer can also convey to the seller if any portion of the commitment that would not be acceptable to the buyer and that can be negotiated or discussed upon.

It is only with the title insurance that protection against title frauds can be sought. This is the only policy that, unlike other policies, does not insure you for the events that will take place in the future. Instead it will insure you for the defects of title that have taken place in the past.

This policy requires the insured to pay just one time premium and they can be insured for up to periods that are desirable by them. In many cases the loan providers will require you to have this policy before they can grant you the loan to buy the property. The title insurance is given to the buyer only after thorough checking of the public records but there are also some hidden hazards that the seller may not disclose at the time of the closing and this is why this policy is a must.

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Commitment for title insurance.

_________ Title Insurance Company (“the company”), for a valuable consideration, here commits to issue its policy or policies of title insurance, as identified in attached Schedule A, in favor of the proposed insured named in Schedule A, as owner or mortgagee of the estate or interest covered by this commitment in the land described or referred to in attached Schedule C, upon payment of the premiums and charges for that insurance and upon receipt of the closing attorney’s final certificate; all subject to the provisions requiring execution and recording of instruments and exceptions noted in attached Schedule B and to the following:
1. The term “mortgage,” when used in this commitment, shall include deed of trust, trust deed, or other security instrument.
2. If the proposed insured has or acquires actual knowledge of any defect, lien, incumbrance, adverse claim or other matter affecting the estate or interest or mortgage on the estate covered by this commitment other than those shown in attached Schedule B, and shall fail to disclose such knowledge to the company in writing, the company shall be relieved from liability for any loss or damage resulting from any act of reliance on this commitment to the extent the company is prejudiced by failure to so disclose such knowledge. If the proposed insured shall disclose such knowledge to the company or if the company otherwise acquires actual knowledge of any such defect, lien, incumbrance, adverse claim or other matter, the company at its option may amend Schedule B of this commitment accordingly, but such amendment shall not relieve the company from liability previously incurred pursuant to paragraph 3 of this commitment.
3. Liability of the company under this commitment shall be only to the named proposed insured and such parties included under the definition of insured in the form of policy or policies committed for and only for actual loss incurred in reliance on this commitment in undertaking in good faith (a) to comply with the requirements of this commitment or (b) to eliminate exceptions shown in Schedule B, or (c) to acquire or create the estate or interest or mortgage on the estate covered by this commitment. In no event shall such liability exceed the amount stated in Schedule A for the policy or policies committed for and such liability is subject to the insuring provisions, the conditions and stipulations and the exclusions from coverage of the form of policy or policies committed for in favor of the proposed insured which are here incorporated by reference and are made a part of this commitment except as expressly modified in this commitment.
4. Any action or actions or rights of action that the proposed insured may have or may bring against the company arising out of the status of the title to the estate or interest or the status of the mortgage on the estate covered by this commitment must be based on and are subject to the provisions of this commitment.
This commitment shall be effective only when the identity of the proposed insured and the amount of the policy or policies committed for have been inserted in attached Schedule A by the company, either at the time of the issuance of this commitment or by subsequent endorsement.
This commitment is preliminary to the issuance of such policy or policies of title insurance and all liability and obligations under this commitment shall cease and terminate 180 days after the effective date of this commitment or when the policy or policies committed for shall issue, whichever first occurs.
In witness, etc.