The title company requests a preliminary title report and policy.
The preliminary report is based on a search of the public records of the county, such as the tax collector, county recorder and assessorâ€™s office. The report may list any liens, encumbrances, taxes, easements, or title defects on the property found in the search. These matters may be listed as exceptions from the coverage of the title insurance policy and will remain exceptions unless they can be released or eliminated prior to the transfer of ownership.
Besides describing the property and spelling out any exceptions to the coverage, which were disclosed in the preliminary report, the title insurance policy sets forth what the title company will do in the event that a flaw in title is discovered or rights of ownership are challenged. This may include correcting the title when possible, defending the title in court or paying a loss in the event of an unsuccessful defense.
The title company records the appropriate documents with the county office giving public notice.
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