Schedule B is the part of a title commitment or preliminary title report that actually decides whether you get clean title, and learning how to read Schedule B on a title commitment comes down to two lists: Schedule B-I tells you what must happen before closing, and Schedule B-II tells you what the title policy will not cover. Schedule A only identifies the property, the buyer, and the price. Schedule B is where the problems live, and it is the section worth your slow, careful attention before you sign anything.
The document may be labeled a preliminary title report or a title commitment, and there is a legal difference between the two: a commitment is a binding offer to issue a policy once B-I is satisfied, while a preliminary report is informational only. For the purpose of reading Schedule B, though, the mechanics are the same. Check the effective date at the top. That date is the cutoff for the title search, and anything recorded after it sits in a gap period the document does not address.
Working Through Schedule B-I
Schedule B-I is a checklist of conditions the insurer requires before it will issue your policy. If any item is still open at closing, the insurer has no obligation to cover you, and the transaction can stall. Read every line and confirm each has an owner and a plan.
The heaviest items are usually financial. If the seller has an existing mortgage, that loan has to be paid off and the lien released before the title company will insure your ownership free of it. Federal law requires mortgage servicers to send an accurate payoff balance within seven business days of a written request from the borrower or someone acting on the borrower’s behalf, so getting current numbers is not typically what holds a closing up.1Office of the Law Revision Counsel. 15 USC 1639g – Requests for Payoff Amounts of Home Loan
Federal tax liens against the seller show up here often. The IRS must issue a certificate of release within 30 days after the underlying tax debt is fully paid or becomes legally unenforceable.2Office of the Law Revision Counsel. 26 USC 6325 – Release of Lien or Discharge of Property If a federal tax lien is on your B-I, the seller pays at or before closing and you want to see the release recorded. State and local tax liens, judgments against the seller, and unpaid property tax assessments follow the same pattern.
Other B-I requirements look smaller but can still block a policy: outstanding HOA dues, a new survey, or an affidavit of identity when the seller’s name matches somebody with a recorded judgment who is actually a different person. Your escrow officer or closing attorney does most of this coordination. Confirming each item is closed out before you sign is still your job.
Reading the Standard Exceptions in Schedule B-II
The top of Schedule B-II is boilerplate. These are categories of risk the insurer refuses to underwrite because they cannot be resolved from public records alone. They appear on almost every policy and are not about your specific property.
- Parties in possession: tenants, occupants, or anyone with rights that are not on record. An unrecorded lease is the classic example.
- Survey matters: encroachments, boundary overlaps, and setback violations that would only surface on a professional survey.
- Unrecorded easements: paths, utility routes, or drainage arrangements neighbors or utilities rely on but never recorded.
- Taxes and assessments not yet due: current-period taxes that have been levied but are not yet payable are not treated as defects.
The point of the standard exceptions is that the title company searched the records, not the ground. If any of these categories would matter to you, that is your cue to order a survey, walk the property, and ask about tenants or informal use arrangements before closing.
Reading the Specific Exceptions in Schedule B-II
Below the standard block is a list of exceptions specific to your parcel, pulled from the chain of title. These are the entries that deserve the most attention because they travel with the land and bind you the same way they bound the seller. Do not rely on the one-line summary in Schedule B. Ask for and read the actual recorded documents referenced.
CC&Rs and Use Restrictions
Covenants, conditions, and restrictions are private rules recorded against the property. They can cap building heights, dictate exterior colors, ban certain uses, or require architectural review. They bind every future owner, not just whoever agreed to them. If your plans for the property conflict with the CC&Rs, closing does not fix that.
Easements
Utility easements are the most common specific exception, granting a utility the right to access a defined strip of your land. You typically cannot put permanent structures inside the easement area. Shared driveways and party walls appear here too, along with the maintenance and change-approval terms that come with them. If your planned deck, pool, or addition would sit inside an easement, you need to know now.
Severed Mineral Rights
If a prior owner separated the mineral rights from the surface, the separation appears as a B-II exception. The mineral holder may have the right to reach the subsurface of your land to extract oil, gas, or other resources. In many states, mineral rights are the dominant estate, so the mineral owner’s access can override the surface owner’s preferences. In areas with active extraction, this line item is not boilerplate.
Specific exceptions are permanent unless something formally removes them. A utility can release an easement. CC&Rs can sometimes be amended by a vote of affected owners. Absent a release, amendment, or court order, these items ride the title through every future sale.
Your Title Review Window
Your purchase contract sets a title review period. That is your window to examine Schedule B, submit written objections, and require the seller to address problems before closing. Length varies. Some contracts allow as few as three business days, others allow 15 or more. There is no universal standard, so check yours the day you receive the commitment.
If the review period expires without written objections, most contracts treat silence as acceptance. Anything you did not challenge becomes a permitted exception, meaning it stays on your final policy with no leverage left to force a fix. If a covered problem later surfaces, the insurer will point to the exception and decline the claim.
Objections go in writing, typically to the seller, the seller’s agent, or the escrow officer, depending on how the contract is structured. Effective objections name the specific Schedule B item and state what you want done: pay off a lien, record a release, move a fence off the neighbor’s line, or obtain an endorsement that narrows the exception. If the seller cannot or will not fix the issue, your contract’s objection provisions may let you terminate, but only if you raised the objection in time.
Narrowing or Removing Schedule B Items
Most Schedule B items are workable. Common paths:
Survey. Providing the title company a current survey that meets industry standards lets the insurer swap the broad survey exception for specific findings. If the survey is clean, the exception comes off. If it shows minor issues, you at least know exactly what they are.
Payoffs and releases. Mortgages, tax liens, and judgment liens on B-I are typically cleared through disbursement at closing, with the escrow officer arranging the recorded release. For federal tax liens, the IRS has up to 30 days after payment to issue the release certificate, so the recorded release may lag the closing.2Office of the Law Revision Counsel. 26 USC 6325 – Release of Lien or Discharge of Property
Identity affidavits. If a recorded judgment against someone with the seller’s name is really against a different person, a sworn affidavit of identity, sometimes with additional verification, gets the requirement removed.
Endorsements. For B-II items that cannot be eliminated, endorsements can add coverage for a specific risk. Access, zoning, and restriction endorsements are common. Fees vary by risk and coverage. Ask your title officer what is available for your file and what it costs.
Enhanced coverage. An enhanced or ALTA homeowner’s policy, available for residential purchases, automatically removes several standard exceptions and adds coverages including post-closing forgery, forced removal of structures that violate permits or zoning, encroachments of your structures onto a neighbor, damage from easement maintenance, and some existing covenant violations. Enhanced policies commonly cover the gap between closing and recording of your deed, when a lien or judgment could still attach through the seller. Standard policies may not. Enhanced policies are not available for every property or for commercial transactions, but on a residential purchase the extra premium is often modest for the exceptions it strips off.
When a Schedule B Item Needs Court Action
Some items cannot be cleared by paying money or recording a release. If the chain of title has breaks, competing claims, or defects no living party can voluntarily cure, the remedy is a quiet title action: a lawsuit asking a court to declare ownership and void competing claims.
An attorney reviews the deed history, files a complaint naming anyone with a possible claim, including unknown heirs and prior lienholders, and serves them (sometimes by publication if they cannot be located). Uncontested actions typically take three to six months. Contested cases can run 18 months or longer. A recorded court order then updates the public record, and the insurer can issue a clean policy. Quiet title cannot wipe out valid, undisputed debts like a real mortgage or a legitimate tax lien; it resolves genuine disputes about ownership or the validity of an encumbrance.
If Schedule B reveals a cloud that needs court action, treat it as a serious signal. The timeline alone can kill the closing. Weigh the property against the delay and legal cost, and remember that a timely objection under your contract preserves the option to walk away.
One Boundary Worth Knowing: Owner’s vs. Lender’s Policy
If you are financing, there are two policies, each with its own Schedule B. The lender’s policy protects the lender’s security interest and ends when the loan is paid off. It does not protect you. An owner’s policy is a separate purchase that protects your equity for as long as you or your heirs own the property. Who customarily pays for the owner’s policy varies by region. Either way, when you review Schedule B, the exceptions on the owner’s policy are the ones that define your personal protection.