Preliminary Title Reports in California

Prepared by a title company early in the escrow process, the title report lays the groundwork for issuing title insurance and ensures that all parties understand any risks or conditions attached to the property. Whether you’re buying or selling, reviewing this report carefully and addressing any issues it raises is crucial for a smooth and secure transaction.

What Exactly is a Preliminary Title Report?

A Preliminary Title Report is a vital document in any real estate transaction, especially in California, where property laws can be complex. It provides a detailed snapshot of the legal status of a property’s title before the sale or refinance is finalized. This report helps buyers, sellers, lenders, and attorneys identify any liens, easements, ownership issues, or other claims that might affect the property’s clear ownership.

What Is a Preliminary Title Report?

A Preliminary Title Report is a document from a title company that shows the current legal status of a property’s title. It lists the owner, any liens, easements, or restrictions, and outlines issues that must be resolved before a sale or refinance can close. Though not an insurance policy itself, the report helps identify risks and sets the terms for issuing title insurance. It ensures all parties are aware of any title problems before the transaction is finalized.

Why It’s Crucial for Real Estate Transactions in California

A Preliminary Title Report is crucial for real estate transactions in California because it reveals any legal or financial issues tied to the property before closing. Given California’s complex property laws and frequent use of easements, trusts, and liens, this report helps buyers avoid costly surprises. It also protects lenders and ensures the buyer receives clear title. Without it, unresolved claims or ownership disputes could delay closing or cause legal problems after the purchase.

What Does a Preliminary Title Report Include?

A Preliminary Title Report includes detailed information that outlines the current legal status of a property’s title. Here are the key components typically found in the report:

1. Property Description: This section provides the legal description of the property, including its boundaries, parcel number, and sometimes a physical address. It ensures the exact property in question is clearly identified.
2. Owner Information: The report provides the chain of title which lists the current legal owner(s) of the property as recorded in public records, confirming who holds title at the time of the search.
3. Recorded Liens and Encumbrances: Any debts or claims against the property are detailed here, such as mortgages, tax liens, judgments, or mechanic’s liens. These must typically be cleared or addressed before transfer of ownership.
4. Easements and Restrictions: Easements grant rights to others to use part of the property (e.g., utility companies), while restrictions may limit how the property can be used (e.g., zoning rules, deed restrictions). These affect the property’s use and value.
5. Covenants, Conditions, and Restrictions (CC&Rs): If the property is part of a homeowner’s association or subject to specific rules, these are noted here. CC&Rs can impact maintenance, improvements, and use of the property.
6. Exceptions to Coverage: The report lists any exceptions or exclusions that the title insurance policy will not cover, alerting buyers to risks that remain after the policy is issued.
7. Legal Actions or Notices: Pending lawsuits, probate matters, or notices such as tax delinquencies that could affect ownership or transfer of the property are included.
8. Tax Status: Information about current property taxes, including any unpaid amounts or special assessments, is also typically shown.

This detailed snapshot enables buyers, sellers, lenders, and attorneys to assess title risks, resolve issues early, and proceed confidently toward closing.

When and how is the Preliminary Report produced?

The Preliminary Title Report is typically produced shortly after a real estate transaction enters escrow, usually within a few days of the escrow officer opening the file. It’s requested by the escrow or real estate agent and prepared by a title company.

To produce it, the title company conducts a title search using public records to gather information about the property’s legal status, ownership history, liens and encumbrances. The resulting report gives all parties a clear picture of title conditions before moving forward.

What is the cost of a Preliminary Title Report?

The cost of a Preliminary Title Report can vary and is typically provided by quote. Please contact us by email or phone, and we’ll be happy to give you an estimate.

How Can a Real Estate Attorney Assist with a Preliminary Title Report?

A real estate attorney can assist with a Preliminary Title Report by reviewing the document for legal issues that may affect the transaction, such as unclear easements, unresolved liens, or ownership disputes. They can explain complex language, identify red flags, and advise whether certain title conditions need to be resolved before closing.

If problems are found, the attorney can negotiate corrections, help clear title defects, or work with the title company and escrow to ensure proper documentation. Their guidance helps protect the buyer’s interests and ensures a smoother, legally sound closing.

Why Is a Preliminary Title Report Important for Sellers?

A Preliminary Title Report is important for sellers because it helps them identify and resolve any title issues—such as liens, unpaid taxes, or ownership discrepancies—before they become obstacles during escrow. Addressing these issues early can prevent delays or cancellations of the sale. It also builds trust with buyers by showing transparency and demonstrating that the property has clear, marketable title. Providing a clean report can lead to a smoother transaction and quicker closing.

The Role of the Preliminary Title Report for Buyers

For buyers, the Preliminary Title Report plays a critical role by revealing any legal or financial claims against the property before purchase. It shows whether the seller has clear ownership and discloses issues like liens, easements, or restrictions that could affect the buyer’s use or value of the property.

By reviewing this report early, buyers can make informed decisions, request corrections if needed, and ensure they’re protected before closing. It also lays the groundwork for obtaining title insurance, which offers long-term protection.

Who Prepares and Provides the Preliminary Title Report?

The Preliminary Title Report is prepared and provided by a title company or title insurance company. After a real estate transaction enters escrow, the title company conducts a thorough search of public records to gather information about the property’s ownership, liens, easements, and any other claims. Once the search is complete, the company issues the report to the buyer, seller, lender, and their agents. This report serves as the basis for issuing the final title insurance policy if the transaction moves forward.

How to Obtain a Preliminary Title Report in California

To obtain a Preliminary Title Report in California, start by opening an escrow account through a real estate agent, lender, or attorney involved in the transaction. The escrow officer or agent will then order the report from a title company on your behalf.

The title company conducts a search of public records related to the property and prepares the report, usually within a few days. You’ll receive the report through your escrow officer, real estate agent, or directly from the title company. If you’re a buyer or seller, it’s important to review it carefully and ask questions about anything unclear.

Can I order a Preliminary Title Report from ProTitleUSA?

Yes! You can order a Preliminary Title Report from us; however, you must submit this request with our customer service department, either by phone or email. Our online ordering system is currently designed just for standard title searches and is not equipped for ordering Preliminary Title Reports.