Episode Description
In this episode of Building Passive Income, CREI Collin breaks down title commitments and surveys and how they impact your real estate investment.
Title commitments and surveys define what you actually own and what limitations exist on the property. If you do not understand these documents, you may inherit legal, financial, or operational risks.
Learn how to read title commitments, analyze surveys, identify red flags, and resolve issues before closing.
What You’ll Learn
How to read a title commitment
What Schedule B-II exceptions mean
What a survey shows and why it matters
How to identify easements, encroachments, and title defects
Red flags that can impact your investment
How to resolve title and survey issues before closing
Key Takeaways
What is a Title Commitment in Real Estate?
A title commitment is a document issued by a title company that outlines the conditions under which title insurance will be provided.
It includes key sections that define ownership, requirements, and exceptions that may impact your use of the property.
Understanding Schedule B-II Exceptions
Schedule B-II lists exceptions to title coverage and is where most risks are identified.
These may include:
Easements for utilities, access, or drainage
Covenants, conditions, and restrictions (CC&Rs)
Liens such as mortgages, tax liens, or judgments
Encroachments or boundary issues
Zoning or use restrictions
This section requires careful review because it defines what is not fully insured.
What Surveys Show
A survey provides a physical representation of the property and confirms how it aligns with legal records.
Surveys typically show:
Property boundaries and dimensions
Location of buildings and improvements
Easements and encroachments
Setback compliance
Access points and utilities
An ALTA survey is the most comprehensive and is typically required by lenders for commercial real estate transactions.
Red Flags to Watch For
Legal descriptions that do not match across documents
Unresolved liens that must be cleared before closing
Easements that limit your ability to use the property
Encroachments from neighboring properties
Zoning or setback violations
Property size discrepancies
Lack of legal access to a public road
How to Resolve Title and Survey Issues
If issues are identified during due diligence, you have several options:
Notify the seller and request resolution
Negotiate a price reduction
Request title insurance endorsements
Restructure the deal
Walk away if the risk cannot be resolved
How This Impacts Your Investment
Title commitments and surveys directly impact your ability to operate, finance, and exit the property.
They can affect your underwriting assumptions, your legal rights, and your long-term investment strategy.
At CREI Partners, these documents are reviewed carefully to ensure risks are identified and addressed before closing.
Episode Highlights
[00:00] Why title commitments and surveys matter
[02:00] What a title commitment includes
[04:30] Understanding Schedule B-II exceptions
[07:00] What surveys show and why lenders require them
[09:30] Common red flags in title and surveys
[11:30] How to resolve issues before closing
Resources Mentioned
Local land use attorneys and zoning consultants
Title insurance endorsements (encroachment, access, zoning)
ALTA/NSPS survey standards
Let’s Talk
If you are reviewing a deal and want help understanding title or survey risks, let’s talk.
Schedule a call with our team:
https://calendly.com/shelbi-creipartners/30min
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Next Episode
Episode 58: Environmental Liens, Zoning Issues, and Hidden Legal Risks
Disclaimer
This podcast is for informational purposes only and should not be considered legal, tax, or investment advice. Always consult with qualified professionals before making investment decisions.
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