Page 2 - The Preliminary Report

The Review
It is important for all parties to review the Preliminary Report
The Preliminary Report is an offer to issue a policy of title insurance covering a particular estate or interest in land subject to stated exceptions.
Since these exceptions may point to potential problems with your intended purchase, it is important for all parties to review the report once it is recieved.
A Preliminary Report provides a list of the mat- ters which will be shown as exceptions to cov- erage in a designated policy or policies of title insurance, if issued concurrently, covering a par- ticular estate or interest in land. It is designed to provide an interim, or “preliminary” response to an application for title insurance and is intend- ed to facilitate the issuance of the designated policy or policies. It is normally prepared after application (order) for such policy(ies) of title insurance on behalf of the principals to a real property transaction, for the purpose of facili- tating requirements relative to closing and pol- icy issuance in form and content approved by those parties.
If a title policy is not contemplated, a Prelimi- nary Report should not be ordered. Instead consideration should be given to requesting a Condition of Title Report or other similar title product.
The Preliminary Report states on its face that it is made solely to facilitate the subsequent is- sueance of a title insurance policy and that the insurer assumes no liability for errors in the re- port. Accordingly, any claim arising from a de- fect in title must be made under the title policy and not the Preliminary Report.
After a title order has been placed, matters relative to the title policy coverage on the sub- ject property are assembled in a title search package and examined by skilled technicians. This is when the Preliminary Report is prepared and sent to the customer. The report contains relevant information so that the parties to the transaction will become aware of matters which will not be insured against by the title compa- ny. This report is issued before the title policy, hence the name Preliminary Report.
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