Expert: Dick Dennis - 5/15/2009

Question
Hi Sir,

I'm buying a new house, and received a prelim title report after signing the contract. In the prelim title report it describes an item in the exception list:

"any defects, liens, encumbrance or other matters which names parties with the same or similar names as ABC (1 matter). The name search necessary to ascertain the existence of such matters has not been completed. In order to complete this preliminary report or commitment, we will require a statement of information."

Is it a cloud on the title?  Here ABC is a name other than the current owner.

The title company is telling me this item will be removed from the exception list at closing escrow. Does this mean when I run a new prelim title report after closing escrow, the above item will not be shown in my new prelim title report?

As a new buyer I'm worried about it. Am I at risk after closing the escrow?

Appreciate any advises from you.

Thanks,
Jeffrey


Answer
Your Realtor should have been able to explain this, Jeff. But almost every prelim has that kind of caveat. It is sort of a catch-all for anything they omitted in the title search. My suggestion is to actually have the title company explain to you just what that paragraph is for. If you and your Realtor see that it is benign, then continue on with your purchase and enjoy your property. I do wish you well.

Dick Dennis