How to read a title commitment, part by part

The short answer

Read a title commitment in the order the insurer wrote it, but review it in the order that controls the loan. The ALTA 2021 commitment has seven parts: the Notice, the Commitment to Issue Policy, the Commitment Conditions, Schedule A, Schedule B Part I (Requirements), Schedule B Part II (Exceptions), and a counter-signature. The form says it is not valid without all of them.

For a lender, Schedule A tells you what will be insured and for whom. Schedule B Part I is the list of things that must happen before the policy issues, and each one becomes a closing task. Schedule B Part II is the list of matters the policy will not cover, and each one needs a decision from lender's counsel. The conditions tell you how much the commitment is actually worth if something goes wrong before closing.

What are the parts of an ALTA title commitment?

Most commercial commitments in the US follow the ALTA Commitment for Title Insurance, revised in 2021 (version 01.00, dated 07-01-2021). Underwriters and states add their own modifications, so the copy on your deal may carry state-specific language or an arbitration variant. The skeleton stays the same, and the glossary entry on the title commitment covers the definition. This post is about reading one.

Every page of the form carries a footer that lists its required parts. A commitment missing a schedule or the counter-signature is not a commitment the insurer has to honor, so check that the file you received is complete before anyone starts marking it up.

What does the Notice on a title commitment mean?

The Notice is printed in capitals for a reason. It says the commitment is an offer to issue one or more title insurance policies, and that any claim about its content must be based solely in contract. It also says the commitment is not an abstract of title, a report of the condition of title, a legal opinion or an opinion of title, and that the insurer's search and examination were performed for the insurer's own benefit.

For a lender, that means the commitment is not a substitute for its own review. Lender's counsel still reads the exception documents, the survey and the vesting chain. The Notice also limits who can rely on the commitment: the insurer's obligation runs to a proposed insured identified in Schedule A, and Commitment Condition 6 says no other person may make a claim. If the lender entity on Schedule A is wrong, the lender may not be the party the commitment protects.

How do you read Schedule A?

Schedule A is five numbered items, and every one of them should tie to a document already in the loan file. Read it next to the loan agreement, the mortgage exhibit and the survey.

• 1
  Commitment Date

  The date through which the insurer searched. Anything recorded after it is not reflected, which is why a later date-down matters.
• 2
  Policy to be issued

  For the lender, a 2021 ALTA Loan Policy, with the proposed insured and the proposed amount of insurance. The amount is usually the loan amount, and the insured name should match the lender entity in the loan documents exactly.
• 3
  Estate or interest in the land

  Fee simple or leasehold. A leasehold estate means the ground lease is part of title review, and the lender's leasehold mortgage depends on it.
• 4
  Vesting

  Who holds title at the Commitment Date, and since when. On a refinance the vested owner should be the borrower. On an acquisition it will still be the seller, and the deed becomes a Schedule B Part I requirement.
• 5
  Legal description

  The land the policy covers. It should match the survey and the exhibit to the mortgage word for word, or counsel should know why it does not.

What are Schedule B requirements?

Schedule B Part I lists the requirements that must be met before the insurer will issue the policy. The 2021 form prints four of them: the proposed insured must tell the insurer about any party not named who will take an interest in the land or make a loan on it; the agreed amount for the estate must be paid; the premiums and fees must be paid; and documents satisfactory to the insurer that create the mortgage must be authorized, executed, delivered and recorded. Then come the requirements written for the deal.

On a commercial loan the deal-specific list usually covers the payoff and release of the existing mortgage, entity documents proving the borrower's authority to sign, good standing certificates, an owner's or mechanic's lien affidavit, releases of judgments or liens found in the search, and the recorded mortgage itself. Condition 5 says the insurer is not obligated to issue the policy until every requirement is met to its satisfaction, so a single open item can hold up the policy.

Each requirement is a task with an owner outside the lender's walls more often than not. Load them into the closing checklist the day the commitment arrives, each as its own line. The working method for clearing them, owner by owner, is in clearing title without drama, so it is not repeated here.

How do you read Schedule B Part II exceptions?

Schedule B Part II opens with two paragraphs before the numbered list. The first says that discriminatory covenants in historical records are treated as redacted, and only the remaining provisions of those documents are excepted. The second says the policy will not insure against the terms of any lease or easement identified in Schedule A, and will include the listed exceptions unless they are cleared to the insurer's satisfaction.

Exception 1 on the printed form is the gap exception: any matter that first appears in the public records, or is created or disclosed, between the Commitment Date and the date all Part I requirements are met. Every numbered exception after that is the insurer's list of Schedule B exceptions for this property. Read them in two groups. Standard exceptions are the general ones many commitments carry, such as rights of parties in possession, matters a survey would show, unrecorded liens and taxes not yet due, and their wording varies by state and underwriter. Specific exceptions name recorded documents: easements, covenants, recorded leases, prior mortgages, declarations.

Ask for a copy of every recorded document listed as a specific exception. An exception that says only an easement recorded in a given book and page tells you nothing about where the easement runs or whether it sits under a building.

How does a lender negotiate Schedule B exceptions?

Lender's counsel gives each Part II exception one of three answers. Delete it, because the matter is resolved or never applied. Accept it, because it is a normal utility easement or a recorded lease the loan expects. Or cover it with an endorsement, because the matter is acceptable in substance but the lender wants affirmative coverage against a specific risk.

The general survey exception is the one most commercial lenders want gone. The insurer removes or narrows the survey exception once it receives a current survey it can rely on, then lists the specific matters that survey shows. Fannie Mae's Multifamily Guide, for example, says an as-built survey must be an ALTA/NSPS Land Title Survey made to the 2026 standards and must allow the title company to delete the standard survey exception from the policy.

One condition limits what a deletion buys. Condition 6 says deleting or modifying a Part II exception does not create an obligation to provide coverage beyond the terms of the commitment or the policy. A deleted exception removes a carve-out. It does not add coverage the loan policy and its endorsements do not already give.

Which commitment conditions matter to a lender?

Most people skip the conditions. They are where the insurer sets the limits on the promise, and a closer should know at least these.

How should you track commitment revisions?

A commercial commitment changes several times before closing. The first version arrives with a short list of requirements, the insurer adds more as it reviews entity documents, and counsel's comments come back as a revised commitment. The Transaction Identification Data block carries a revision number for that reason.

Keep every revision, compare each one against the last, and update the checklist lines from the new version rather than from memory. When commitments live in email threads, the closer ends up asking which PDF is current. The comparison of email and shared drives versus a shared checklist shows where that breaks down. Title is also one of the long poles on the calendar: the closing timeline estimator helps set the date by which title should be clean, with room for one more revision.

Where does the commitment live during the close?

On a well-run deal the commitment is not a PDF that one person reads. Every Part I requirement is its own line on the live checklist, with an owner and a due date, and every Part II exception has a note recording counsel's decision. In Prodeal those lines carry document status, so the borrower's counsel can see which requirements are waiting on them through the client portal, and the audit trail shows when each one cleared.

When the commitment is marked at closing, the lines should already be closed. If the mark-up is the first time anyone reads Schedule B in full, the deal is late.