Beware Of Preliminary Title Reports

The shakiest thing besides an earthquake is a preliminary title report. You can rely on these as much as winning the lottery with one dollar. These reports simply do not reveal encumbrances and liens that may be attached to the property, also they do not represent condition of title.A title insurer is not liable for inaccuracies a preliminary title report fails to uncover. In California a prelim title report is no more than an offer to issue a title insurance policy based on the contents of the prelim title report and any modifications made by the title company before the policy is issued. A prelim title report discloses special taxes, assessments, bonds, covenants, conditions, restrictions, easements, rights of way, liens and, any interest of others which may be reflected on public record as affecting title, collectively called encumbrances. Escrow will use prelim title reports to detect any defects that might affect title. The escrow officer will review the title report. They are responsible for advising the seller to eliminate any encumbrances on title that would disrupt closing of escrow. There is a written statement called an Abstract Of Title that is more reliable than a prelim title report. The Abstract title is a statement of facts gathered together from public records. An abstract of title is not an insurance policy. This is separate from title insurance. Title insurance is required before the close of escrow. Bottom-line: The prelim title report is simply an offer by a title company to offer title insurance. It is subject to change prior to issuing the policy of title insurance. Whenever you need a title report request a Abstract of Title before a prelim title report. It will save you the headache..