Reviewing your preliminary title commitment

What the preliminary commitment is

The preliminary commitment (most people say prelim or title report) is the title company's statement of what it found in the public record and what it will insure, on what conditions. Form 21 Specific Term No. 9 names the Title Insurance Company, and General Term e directs that company to send the commitment to the seller, the listing broker, you and your broker. It arrives as a PDF, often within a week of mutual acceptance.

Three parts matter. Schedule A shows who currently holds title (the vested owner), the legal description, and the policy to be issued. Schedule B, Part I lists requirements to close, such as paying off the seller's existing deed of trust and recording your deed. Schedule B, Part II lists exceptions: the recorded matters the policy will not insure against, each tied to a King County recording number. The commitment usually comes with copies of the recorded documents behind those exceptions, and those copies are what you actually read.

The commitment is not the policy. The policy issues after closing, once the deed records with the King County Recorder's Office, and it insures the title you receive, subject to the exceptions that remain on the final schedule. Your review window exists so that what remains is what you agreed to.

Your review window under Form 22T

Form 22T makes your contract subject to your review of the commitment and the recorded documents behind it. Paragraph 1 gives you the days written on it (5 if blank) to give notice disapproving any exception. Two boxes decide when the clock starts: your receipt of the commitment, or mutual acceptance. If neither is checked it runs from receipt (or from mutual acceptance, if the commitment arrived earlier). A 5-day period is counted under Form 21 General Term l: weekends and legal holidays are skipped and it ends at 9:00 p.m.

If you object in writing within the window, the seller has the days written on the form (again 5 if blank) to notify you that the seller will clear all disapproved exceptions, and until the Closing Date to clear them. If the seller does not give that notice on time, you may terminate within 3 days after the seller's deadline, with your earnest money returned. If you do not terminate on time, you are deemed to have waived all objections the seller did not agree to clear.

Silence in your own window means no objection, and the exceptions stand. Paragraph 2 restarts the process for any new exception on a supplemental report, running from your receipt of it, and extends closing if the notice periods need it.

What you will see: common exceptions in King County

Most Eastside commitments show exceptions, and most are ordinary. Form 21 General Term d already says certain matters do not make title unmarketable: covenants, conditions and restrictions of record and general to the area; easements and encroachments that do not materially affect value or unduly interfere with your reasonable use; and reserved oil and mineral rights.

Read the exceptions against how you plan to use the property. An easement under a proposed addition, a CC&R banning the fence you want, or an access easement across the yard is worth a same-day call to your agent; a Puget Sound Energy easement along the back property line usually is not. The common King County exceptions:

• General taxes and assessments for the current year, prorated at closing under Form 21 General Term h.
• Utility easements to Puget Sound Energy, the water and sewer district, or the city, usually along a property line.
• CC&Rs recorded when the plat was created, governing setbacks, fences, RV parking and architectural approval; in a planned community the association declaration sits here too.
• Plat notes from the recorded subdivision map: native growth protection easements, drainage easements, and access easements over shared driveways.
• The seller's existing deed of trust, a Schedule B Part I requirement paid off and reconveyed at closing, not an exception that survives.

Owner's policy, lender's policy, and who pays

Two policies issue at closing on a financed purchase. The owner's policy protects you, for as long as you own the property, against covered title defects that existed before you bought and were not listed as exceptions: a forged deed in the chain, an unreleased lien, an heir who never signed. Form 21 General Term e has the seller pay for the then-current ALTA Homeowner's Policy of Title Insurance for One-to-Four Family Residence or, if that policy is unavailable for the property, a Standard Owner's Policy with the endorsements the form lists.

Form 22D paragraph 1 lets the parties change that: less coverage with a Standard Owner's Policy, or more with an Extended Coverage Policy, where you pay the extra premium and any survey the insurer requires. If neither box is checked, the Form 21 default applies.

The lender's policy protects only the lender, for the loan amount, for as long as the loan is outstanding. Form 21 General Term h lists lender's title insurance among the buyer's loan costs, so it appears on your side of the settlement statement. It pays nothing to you. Premiums are filed with the Washington Office of the Insurance Commissioner and paid once, at closing. On a cash purchase there is no lender's policy.

Title officer, escrow officer, and what to do if something looks wrong

The title officer works for the title insurance company. That person wrote the commitment and decides what the company will insure. Questions about an exception or whether it can be removed go to the title officer, through your agent; the name and number are on the commitment's cover page. The escrow officer works for the Closing Agent named in Specific Term No. 10 and handles the money and documents: earnest money, the seller's payoff, your loan documents, the settlement statement and recording. The escrow officer does not decide what title is insurable.

If something looks wrong: tell your agent the same day. Your agent talks to the title officer to learn what the item is and whether it can be cleared. If you want it removed, your agent delivers a written disapproval notice to the seller before your Form 22T window closes. Written means delivered as Form 21 General Term k requires: signed by at least one buyer and received by the seller, the listing broker or the listing broker's office. A text to your agent is not notice to the seller.

Whether an exception is acceptable is your decision. If it turns on legal effect, a Washington real estate attorney is the right reader; neither the title officer nor RexMont gives legal advice.