Schedule A: The Deal Itself
Schedule A of a title commitment identifies the transaction the title insurer is proposing to insure. It typically lists the commitment's effective date, the proposed insured parties (the borrower taking title and the lender receiving a mortgage or deed of trust), the proposed policy amount, the current vested owner of record, and the legal description of the property.
Originators and underwriters review Schedule A first to confirm the borrowing entity, the loan amount, and the legal description all match the loan application and other closing documents; a mismatch here is usually a sign that closing documents need to be corrected before moving forward.
Schedule B, Part I: Requirements to Clear
Schedule B, Part I lists the requirements that must be satisfied before the title company will issue the final policy. Common requirements include paying off and releasing an existing mortgage, recording the new loan documents, delivering a satisfactory current survey, resolving any liens or judgments against the borrower or seller, and paying the title premium and recording fees.
Every item on this list must be cleared, waived, or otherwise addressed; an open requirement is the title company's way of saying it will not yet insure the loan against that particular risk.
Schedule B, Part II: Standing Exceptions
Schedule B, Part II lists matters the policy will not insure against even after closing. These typically include recorded easements and rights-of-way, restrictive covenants or CC&Rs, real estate taxes not yet due and payable, mineral or subsurface rights reservations, and matters that an accurate survey would disclose.
Many Part II exceptions are routine and do not concern lenders: a standard utility easement along a property line, for example, is common and rarely a problem. Underwriters focus on exceptions that could interfere with the collateral's use, value, or the lender's ability to foreclose, such as an easement running through a building footprint or an unusually restrictive covenant.
Why an Unclean Title Stalls Closing
A commercial loan cannot close with unresolved Schedule B, Part I requirements outstanding, because the lender's title policy, its core protection against a defect in ownership, is not yet ready to be issued. An open lien, an unreleased prior mortgage, or a judgment against the borrower or seller typically must be paid, released, or bonded around before the title company will remove it from the requirements list.
Title curative work, such as tracking down old lien releases, correcting a name discrepancy in the chain of title, or resolving a boundary dispute flagged by the survey, is one of the most common sources of closing delay in commercial real estate, which is why experienced originators order title work early and monitor the commitment for changes as closing approaches.
Typical Schedule B Exceptions (Part II)
- Recorded easements and rights-of-way
- Restrictive covenants and CC&Rs
- Real estate taxes and assessments not yet due
- Mineral or subsurface rights reservations
- Matters an accurate survey would disclose
Common Title Curative Issues That Delay Closing
- An unreleased prior mortgage or deed of trust
- An open judgment or federal tax lien against the seller or borrower
- A name discrepancy between the vested owner and the loan documents
- A missing or defective deed in the property's chain of title
- A boundary or easement conflict flagged by the survey
Schedule A vs. Schedule B at a Glance
| Section | Purpose | Typical Contents |
|---|---|---|
| Schedule A | Identifies the deal being insured | Effective date, proposed insured parties, policy amount, legal description, current record owner |
| Schedule B, Part I | Requirements to satisfy before the policy is issued | Lien payoffs and releases, recording of new loan documents, delivery of a satisfactory survey, payment of premiums and fees |
| Schedule B, Part II | Standing exceptions the policy will not insure against | Recorded easements, restrictive covenants, unpaid taxes, mineral rights reservations, survey matters |
An Open Requirement Means No Funding
Until every item on Schedule B, Part I is satisfied (a lien released, a judgment resolved, a survey delivered), the title company has not committed to insuring the loan without that risk, and lenders will not fund. Track the commitment closely as closing approaches; new exceptions can appear in updated versions.
Module Check
In a title commitment, which section lists the actions that must be completed before the title company will issue the final policy?