How to Read a Prelim in 10 Minutes

Short answer

A preliminary title report has four parts worth your attention: the effective date, Schedule A (who owns it and what estate is being insured), Schedule B (every exception the policy will not cover), and the attached plat map. Read them in that order. Ten minutes on the prelim in week one saves two weeks at the end of escrow.

Minute 1: the effective date

Everything in the report is true as of that date and no later. If the prelim is three weeks old, liens recorded since then are invisible to it. Before signing, order a date-down. On a distressed or recently remodeled property, treat any prelim older than two weeks as stale.

Minutes 2–3: Schedule A

Four things:

• The insured amount and policy type — CLTA owner's policy, ALTA lender's policy, or both.
• The estate — fee simple in most residential files. A leasehold, a life estate, or an undivided interest changes the whole transaction.
• The vested owner, exactly as titled. "John A. Smith and Mary Smith, husband and wife as community property with right of survivorship" is not interchangeable with "The Smith Family Trust." If the vesting does not match your seller, stop and resolve it now.
• The legal description. Confirm the lot and tract match the address you think you are selling. On split lots and nonconforming parcels in older Torrance and Redondo tracts, they sometimes do not.

Minutes 4–8: Schedule B, item by item

Schedule B is the list of things the policy excludes. Every item is either routine, actionable, or a deal problem. Sort them as you read:

Routine — expect these on nearly every file

• Current-year property taxes not yet due.
• Standard CC&Rs of record for the tract.
• Utility easements along the side and rear lot lines.
• The general "rights of parties in possession" and survey exceptions.

Actionable — must be cleared or paid through escrow

• Deeds of trust: confirm which are being paid off and order demands immediately. Watch for an old, small second that everyone forgot about.
• Delinquent or supplemental property taxes.
• HOA liens or unpaid assessments.
• Mechanics liens — and if the property was recently remodeled, ask for unconditional releases even when none appear yet. See mechanics liens in California.
• Abstracts of judgment and state or federal tax liens, including name-match hits that clear with a Statement of Information.

Deal problems — flag same day

• An easement a structure now sits on top of.
• A lis pendens, meaning there is pending litigation affecting title. See lis pendens explained.
• An uninsured deed in the chain — a quitclaim or interspousal transfer recorded outside escrow. See uninsured deeds.
• Trust or estate vesting with no successor documentation.
• Anything you cannot explain in one sentence. Call your title rep instead of guessing.

Minutes 9–10: the plat map and the requirements

The plat map shows lot dimensions and mapped easements. Overlay it against the actual improvements — the pool, the deck, the garage addition, the shared driveway. Encroachments are found here, not in the narrative.

Then read the requirements section. This is what the underwriter needs before it will insure: a Statement of Information from each party, a certification of trust, entity documents for an LLC seller, or a payoff demand. Each of those is a task with a lead time. Assign them the day you read the prelim.

The one-page triage you can run on any prelim

1. Is the effective date current?
2. Does Schedule A vesting match my seller, exactly?
3. Which Schedule B items require money at closing?
4. Which require a document, and who is producing it?
5. Is anything on the plat map sitting where it should not be?

If all five have answers by day three, the file usually closes on time.

Frequently asked questions

Is a preliminary title report the same as title insurance? No. It is an offer to insure on stated terms — a list of what the policy would exclude. It is not a representation about the condition of title.

How long is a prelim good for? There is no fixed expiration, but underwriters run a date-down before closing. Treat anything older than two weeks as needing a refresh.

What is Schedule B? The list of exceptions — matters the title policy will not cover, from routine CC&Rs to active liens.

Who orders the preliminary title report? Whoever opens escrow, usually the listing agent or the escrow officer, on the day the file opens.

Send us the prelim

Matt Goeglein and Xavi de la Piedra IV read South Bay and Westside prelims every day. Send one over and we will mark up which Schedule B items are noise and which need action this week. Deeper reference: preliminary title report explained.