The items listed in a title commitment that the title policy will not insure against, such as easements, restrictions, and matters a survey would show.
The longer version
Schedule B splits into two lists. B-I requirements are conditions to issuing the policy at all. B-II exceptions are carve-outs from coverage that survive closing, including recorded easements, covenants, and standard exceptions like parties in possession.
Lender's counsel reads every exception against the survey and the use of the property, negotiates endorsements or removals where coverage matters, and accepts the rest. The negotiation is document-heavy and involves the title company, the surveyor, and sometimes tenants, which is why exception clearing shows up on nearly every closing timeline.
Common questions
- What are Schedule B exceptions?
- The items in Schedule B-II of a title commitment that the policy will not insure against, such as easements, covenants, encroachments and the standard survey and parties-in-possession exceptions.
- Can Schedule B exceptions be removed?
- Some can. Standard exceptions often come off with a current survey and owner's affidavit. Others can be insured over with endorsements. Recorded easements and restrictions usually stay and are reviewed for their effect on the property.
- Who reviews Schedule B exceptions?
- Lender's counsel, reading each exception against the survey and the loan's needs. Plotted easements under the building are the ones that need the closest look.
- The commercial loan closing checklistWhat goes on the list and who owns each line.
- The CRE due diligence checklistEvery phase of diligence, organized the way deals close.
- Why deals stall in the last two weeksWhere the days go, and how they come back.
- Audit trail softwareThe record an examiner asks for, exportable as a file.