ALTA Title Commitment 1 — Questions and Answers
Question 1: A standard ALTA title commitment is organized into how many main schedules?
- One schedule listing all encumbrances and requirements
- Two schedules: Schedule A and Schedule B
- Three schedules: Schedule A, Schedule B-I, and Schedule B-II (Correct answer)
- Four schedules: A, B, C, and D
Correct answer: Three schedules: Schedule A, Schedule B-I, and Schedule B-II
A standard ALTA title commitment is divided into Schedule A (transaction details), Schedule B-I (requirements), and Schedule B-II (exceptions to coverage).
Question 2: What information is typically found in Schedule A of a title commitment?
- A list of requirements the seller must satisfy before closing
- Exceptions and exclusions that will remain in the final policy
- The effective date, proposed insured, policy amount, and current vesting of title (Correct answer)
- Conditions that must be met before the policy is issued
Correct answer: The effective date, proposed insured, policy amount, and current vesting of title
Schedule A contains identifying transaction details including the effective date, proposed insured, amount of insurance, and how title is currently vested.
Question 3: Schedule B-I of a title commitment lists items that:
- Will appear as permanent exceptions in the final policy
- Must be satisfied or performed before the title policy will be issued (Correct answer)
- Describe the legal boundaries of the insured property
- Identify all recorded lienholders by name and amount
Correct answer: Must be satisfied or performed before the title policy will be issued
Schedule B-I contains requirements—conditions that must be met or satisfied before the title company will issue the title insurance policy.
Question 4: Which of the following would most likely appear in Schedule B-II of a title commitment?
- The payoff amount required to release an existing mortgage
- A requirement to provide a current ALTA survey
- A recorded utility easement running across the property (Correct answer)
- The identity of the proposed insured under the owner's policy
Correct answer: A recorded utility easement running across the property
Schedule B-II lists exceptions to coverage—matters such as easements, restrictions, and encumbrances that will NOT be insured under the final policy.
Question 5: The effective date of a title commitment is significant because it:
- Determines the deadline for paying the title insurance premium
- Establishes the date through which the public records were searched (Correct answer)
- Sets the scheduled closing date for the real estate transaction
- Indicates when the commitment automatically expires by its own terms
Correct answer: Establishes the date through which the public records were searched
The effective date establishes the date through which the title examiner has searched the public records, defining the starting point of the insurer's risk.
Question 6: Under the ALTA 2021 Commitment for Title Insurance, how long is the commitment valid before it expires?
- 30 days from the Commitment Date
- 90 days from the Commitment Date
- Six months from the Commitment Date (Correct answer)
- One year from the Commitment Date
Correct answer: Six months from the Commitment Date
Under the ALTA 2021 Commitment for Title Insurance, the commitment expires six months from the Commitment Date unless the transaction closes before that time.
Question 7: A title commitment is best described as:
- A guarantee that the property has no title defects whatsoever
- A final title insurance policy that takes effect at the time of application
- A promise by the title company to issue a policy once stated conditions are satisfied (Correct answer)
- An abstract of title summarizing the complete chain of ownership
Correct answer: A promise by the title company to issue a policy once stated conditions are satisfied
A title commitment is the title company's conditional promise to issue a title insurance policy once all requirements in Schedule B-I are satisfied.
ALTA Title Commitment 1
A standard ALTA title commitment is organized into how many main schedules?