Title Insurance -

Preliminary Title Report (AKA: Prelim)

Understanding The Preliminary Title Report

The California Land Title Association has answered some of the questions most commonly asked about the Preliminary Title Report (or commonly know in the industry as “Prelim”).

What is a Prelim? A prelim is a report prepared prior to issuing a policy of title insurance that shows the ownership of a specific parcel of land, together with the liens and encumbrances thereon, which will not be covered under a subsequent title insurance policy.

What role does a Prelim play in the real estate process? A prelim contains the conditions under which the title company will issue a particular type of title insurance policy. It lists, in advance of purchases, title defects, liens and encumbrances that would be excluded from coverage if the requested title insurance policy were to be issued as of the date of the Prelim. The report may then be reviewed and discussed by the parties to a real estate transaction and their agents. Thus, a Preliminary Title Report provides the opportunity to seek the removal of items referenced in the report that are objectionable to the buyer prior to purchase.

What should I look for when reading my Prelim? You will be interested, primarily, in the extent of your ownership rights. This means you will want to review the ownership interest in the property you will be buying, as well as any claims, restrictions or interests of other people involving the property.

How do I go about clearing unwanted liens and encumbrances? You should carefully review the Preliminary Title Report. Should the title to the property be clouded, you and your agents will work with the seller and seller’s agents to clear the unwanted liens and encumbrances prior to taking title to the property.

Who can I turn to for further information regarding the Prelim? Your real estate agent and your attorney, should you chose to use one, will help explain the Prelim to you. Your escrow and title company can also be helpful sources.

Conclusion: In a business, which is directed at risk elimination, the efforts leading to the production of the Prelim, which is designed to facilitate the issuance of a policy of title insurance, are perhaps the most important factors undertaken.