The Preliminary Report is an offer to issue a policy of title insurance
covering a particular estate or interest in land subject to stated exceptions.
Since these exceptions may point to potential problems with your intended
purchase, it is important for all parties to review the report once it is
A Preliminary Report provides a list of the matters which will be shown as
exceptions to coverage in a designated policy or policies of title insurance,
if issued currently, covering a particular estate or interest in land. It is
designed to provide an interim, or "preliminary" response to an application for
title insurance and is intended to facilitate the issuance of the designated
policy or policies. It is normally prepared after application (order) for such
policy(ies) of title insurance on behalf of the principals to a real property
transaction, for the purpose of facilitating requirements relative to closing
and policy issuance in form and content approved by those parties.
If a title policy is not contemplated, a Preliminary Report should not be
ordered. Instead, consideration should be given to requesting a Condition of
Title Report or other similar title product.
The Preliminary Report states on its face that it is made solely to facilitate
the subsequent issuance of a title insurance policy and that the insurer
assumes no liability for errors in the report. Acccordingly, any claim arising
from a defect in title must be made under the title policy and not the
After a title order has been placed, matters relative to the title policy
coverage on the subject property are assembled in a title search package and
examined by skilled technicians. This is when the Preliminary Report is
prepared and sent to the customer. The report contains relevant information so
that the parties to the transaction will become aware of matters which will not
be insured against by the title company. This report is issued before the title
policy, hence the name Preliminary Report.
The matters shown in the report are as follows:
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The estate of interest covered.
The owner of the estate or interest.
The parcel of land involved.
The exceptions, liens, encumbrances and other risks which will not be insured
against if a title policy is issued.
Other requirements and provisions which are reflected as "Notes" in the
Preliminary Report which are removed if and when a title policy is issued.