Question 1

What are Schedule B exceptions in a title commitment?

Accepted Answer

Schedule B exceptions: matters excluded from coverage under the title insurance policy. The title company: will not pay claims for losses arising from these excepted matters. Types: standard exceptions (pre-printed exceptions that appear in all commitments: survey matters, taxes, parties in possession, and mechanic’s liens), and special exceptions (specific items discovered during the title search: recorded easements, restrictive covenants, HOA restrictions, encroachments, and existing liens or encumbrances). The buyer: should review all exceptions carefully and determine whether any are unacceptable.

Question 2

How can Schedule B exceptions be removed or modified?

Accepted Answer

Removal: standard exceptions (survey: provide a current survey; parties in possession: provide an affidavit that no parties are in possession other than the seller; taxes: verify payment of all taxes; mechanic’s liens: provide a no-lien affidavit from the seller), and special exceptions (recorded liens: pay off and obtain a satisfaction or release; easements: cannot typically be removed; the buyer must accept them or negotiate with the seller; restrictions: may be modified by recording a modification or obtaining a release from the restricting party). The title company: may charge additional fees for removing standard exceptions.

Question 3

What are the most common unacceptable exceptions?

Accepted Answer

Unacceptable: easements that restrict the buyer’s intended use (e.g., a utility easement through the building footprint), restrictions that prohibit the buyer’s planned use (e.g., a covenant prohibiting commercial use), unreleased liens (mortgages, judgments, or tax liens that should have been satisfied), encroachments (structures that cross property lines or encroach into easements), and unrecorded matters (leases, options, or other agreements that are not in the public records but affect the property). Resolution: the seller must cure the objection, the buyer must accept the exception, or the transaction is terminated.

Title Commitment Schedule B: Exceptions

Schedule B Exceptions in Title Commitments

Types

Removal

Unacceptable

Related Terms

Barnes Walker Real Estate

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