The short answer
Clear title by working the commitment's Schedule B as a task list the day it arrives. Every requirement in Part I gets an owner and a due date. Every exception in Part II gets a decision: accept it, remove it, or cover it with an endorsement. The hard items then surface in the first weeks, while there is time to fix them.
Nearly every exception that holds up funding is printed in the first commitment. The bring-down search right before closing catches the rest, meaning anything recorded after the commitment's effective date.
What is in a title commitment?
A title commitment is the title company's offer to issue a policy once stated conditions are met. The American Land Title Association publishes the standard commitment form, most recently revised in 2021, and commercial commitments follow its structure.
Schedule A identifies the commitment date, the proposed policy amount, the proposed insured, the current owner of the land and the legal description. Schedule B has two parts. Part I lists the requirements to satisfy before the policy issues. Part II lists the exceptions the policy will leave out of coverage.
The OCC's Commercial Real Estate Lending handbook adds a cross-check for lenders: the property description should be identical on the mortgage or deed of trust, the security agreement and assignments, the title policy, the survey and the property tax statement. A mismatch found at closing means corrective documents under deadline.
What is the difference between Schedule B-I and B-II?
The two parts call for different work from different people.
| Question | Part I: requirements | Part II: exceptions |
|---|---|---|
| What it lists | Actions that must happen before the policy issues | Matters the policy will leave out of coverage |
| Typical items | Payoff and release of existing liens, recorded loan documents, entity authority documents, satisfied judgments | Recorded easements, covenants and restrictions, survey matters, rights of tenants in possession, taxes not yet due |
| Who does the work | Borrower, borrower's counsel, prior lenders and the title company | Lender's counsel reviews, the title company deletes or endorses, the surveyor supports |
| How the item closes | The title company marks the requirement satisfied | The exception is deleted, accepted in writing or covered by an endorsement |
| Cost of reading it late | Funding waits on a release or document from an outside party | The lender finds a coverage gap after the loan documents are final |
Which title problems take the longest to clear?
The slowest items share one trait. Each needs a document or a decision from someone outside the transaction.
- Releases of paid-off liensA mortgage paid off years ago with no recorded release needs the old lender, its successor or its servicer to sign one. Banks that merged or failed stretch this out.
- Judgments and name matchesA judgment against a party with a similar name needs an identity affidavit or other proof that the debtor is a different person or entity.
- Mechanics' liensRecent work on the property can support lien claims. Clearing them takes lien waivers, a bond or an indemnity the title company will accept.
- Survey mattersEncroachments, easement conflicts and boundary questions go back to the surveyor and sometimes to a neighboring owner.
- Signing authorityThe title company needs proof that the people signing can bind the borrower. Layered ownership structures need resolutions at each level.
- Tenants in possessionThe standard exception for parties in possession stays until the rent roll, leases and estoppels support removing or limiting it.
When can an endorsement insure over an exception?
An endorsement adds coverage for a specific risk the base policy excludes or limits. Lenders use endorsements for matters that are acceptable in substance and slow or costly to remove. ALTA publishes the standard endorsement forms, and state insurance regulation governs which ones a title company may issue and how they are priced.
| Endorsement | What it covers | Where lenders use it |
|---|---|---|
| ALTA 3 series, Zoning | Loss if a court orders the use or structure changed for violating zoning | Stabilized properties where the permitted use supports the value |
| ALTA 9, Restrictions, Encroachments, Minerals | Loss from covenant violations, certain encroachments and mineral extraction damage | A routine request on commercial loan policies |
| ALTA 17, Access and Entry | Loss if the land lacks actual vehicular and pedestrian access to a named street | Properties that depend on a specific access point |
| ALTA 18, Single Tax Parcel | Loss if the land is assessed together with other land | Collateral that has to stand alone for property taxes |
| ALTA 19, Contiguity | Loss if insured parcels are separated by gaps or gores | Collateral assembled from multiple parcels |
| ALTA 25, Same as Survey | Loss if the land differs from the land shown on a named survey | Loans closed on a new survey |
How does the survey affect the title policy?
The survey drives the survey exceptions in Part II. A title company generally removes its broad survey exception once it receives a current survey it can rely on, then lists specific exceptions for the matters that survey shows.
ALTA and the National Society of Professional Surveyors publish joint standards for land title surveys. Lenders pick optional Table A items, such as zoning setbacks, flood zone classification or parking counts, to match what underwriting and the endorsements need.
Order the survey early and send it to the title company the day it arrives. Each comment round between the surveyor, the title company and lender's counsel takes days, and the final survey has to match the legal description in the loan documents.
What happens to title between commitment and funding?
- Review and objectionsLender's counsel reviews the first commitment and sends title objections. The title company answers with revised commitments.
- Clearing requirementsBorrower's counsel and the title company collect releases, payoff letters and authority documents, and the title company marks each requirement satisfied.
- Pro forma policyThe title company issues a pro forma showing the coverage, exceptions and endorsements the lender will receive. Counsel approves it before closing.
- Bring-down searchRight before funding, the title company searches for anything recorded since the commitment date.
- RecordingAt closing, the title company records the mortgage or deed of trust under the closing instructions and handles coverage for the gap between the last search and recording.
- Final policyThe title company issues the final lender's policy after recording, and the post-closing team tracks its delivery into the file.
How does title work differ for a refinance, an acquisition and a construction loan?
A refinance keeps the same owner. The title work centers on paying off and releasing the existing lender, confirming the borrower's signing authority, and catching anything recorded since the owner bought the property. The lender's policy is usually the only new policy.
An acquisition adds the seller. The seller delivers the deed, an owner's affidavit and releases of its own liens, and the title company issues an owner's policy to the buyer alongside the lender's policy. Seller cures run through the purchase contract's title objection process, so lender's counsel should coordinate objections with buyer's counsel from the start.
A construction loan keeps title work running after closing. Mechanics' lien priority has to be managed draw by draw, and ALTA publishes endorsements for it, including the ALTA 32 construction loan endorsement and the ALTA 33 disbursement endorsement that updates coverage as advances fund.
How do you keep title out of closing week?
Treat the day the first commitment arrives as the start of title work. Log every requirement and every rejected exception as its own item, with a named owner and a due date that leaves two weeks before funding.
Hold a short weekly title call through the middle of the closing, then review title items daily in the final two weeks. Ask the title company to review signature packets and entity documents before execution, since an authority problem found at the table stops the closing on the spot.
Prodeal tracks each Schedule B item as its own checklist line with an owner, a due date and a status that the title company and borrower's counsel can see. A stuck release then shows up in week two.
Prodeal customer results, from the Prodeal 2026 platform overview.
Questions lenders ask
- What is Schedule B of a title commitment?
- Schedule B lists what stands between the current state of title and the policy the lender wants. Part I lists requirements to satisfy before the policy issues, such as lien payoffs and recorded releases. Part II lists exceptions the policy will leave out of coverage, such as easements, restrictions and survey matters.
- What does it mean to insure over a title exception?
- Insuring over means the title company agrees to cover a known matter, through an endorsement or by deleting the exception, so the lender is protected if that matter causes a loss. The title underwriter decides based on the risk and may ask for affidavits, a survey or an indemnity first.
- How long does it take to clear title on a commercial property?
- It depends on the exceptions. A clean commitment clears quickly. A missing release from a bank that merged or failed can take weeks, and so can a survey dispute with a neighbor. Reading Schedule B on day one shows which kind of closing you have.
- What is a title bring-down?
- A bring-down is an updated search run shortly before closing to find anything recorded after the commitment's effective date, such as a new lien or judgment. The title company updates the commitment with any new matters, and the lender's coverage then extends through recording under the closing instructions.
- What is a pro forma title policy?
- A pro forma is a sample of the final policy that shows the insured amount, remaining exceptions and endorsements exactly as they will issue. Lender's counsel reviews it before closing, so coverage questions get settled while the parties can still negotiate.
- Who pays for title insurance on a commercial loan?
- In a refinance, the borrower typically pays the lender's policy premium as a closing cost. In an acquisition, the purchase contract and local custom decide who pays for the owner's and lender's policies. The settlement statement is the place to confirm it.
- What is an owner's affidavit?
- An owner's affidavit is a sworn statement from the property owner about matters a public records search can miss, such as unrecorded leases, recent work that could support lien claims and parties in possession. Title companies rely on it to remove or narrow standard exceptions in the policy.