What does title mean?
Title refers to the legal rights associated with owning a property. A title search reviews public records for ownership history, recorded liens, easements, restrictions, judgments, and other matters that may affect ownership or use. The preliminary title report is an important document to read—not simply a routine form to sign.
What does title insurance do?
Title insurance is designed to protect against certain covered title problems, subject to the policy's terms, exclusions, and exceptions. A lender generally requires a lender's policy to protect its security interest. An owner's policy, when purchased, protects the buyer's ownership interest up to the policy terms. The policies serve different interests; ask the title company to explain the coverage, premium, exceptions, and who is expected to pay under the contract.
What should you review in the preliminary title report?
- Current vesting: Confirm the owner names and legal description appear consistent with the transaction.
- Loans and liens: Look for deeds of trust, tax liens, judgments, or other recorded encumbrances that may need to be paid or addressed.
- Easements: Understand recorded rights for utilities, access, drainage, or shared use that may affect the property.
- Restrictions and covenants: Review recorded restrictions and coordinate with HOA documents where applicable.
- Exceptions: Ask what the policy will not cover and whether any listed matter needs additional review.
- Legal description: Confirm the parcel being transferred is the one you intend to purchase.
Questions to ask
Ask the title officer to explain unfamiliar exceptions, whether any liens require payoff, whether access is insured, whether the property is subject to recorded agreements, and what additional documents may be needed. If ownership will be shared, held in a trust, or vested in a particular way, consult a qualified California real estate attorney or tax professional before closing. Agents and escrow staff cannot provide individualized legal or tax advice.
Coverage varies by policy form and endorsements. Read the actual policy and consult the title insurer or an attorney about legal questions.