Title Exceptions

What Are Underlying Documents?

A preliminary title report (PTR) will list some very key information, including the legal description of the property and ownership vesting.  Another key element within this PTR is the list of title exceptions, which are items that the title company will not insure against.  And some of these exceptions are referring to recorded documents – sometimes referred to as “underlying documents”.

As an example, a title exception may be an easement that was granted to a utility company.  In the title report, the exception will have a short summary of the easement title, date recorded, who benefits, and probably the recorded document number issued by the County Recorder.  The underlying document is the actual recorded easement, which is usually accessed by a hyperlink in the PTR.  It is important to review this underlying document to make sure you understand how this recorded easement can impact the use of the property.

Other underlying documents can be a deed of trust (securing a loan), CC&R’s, reimbursement agreements, court judgments, mechanics liens, and other various recorded documents.  These underlying documents may range from one page to many pages, and they all can contain critical information that encumber the property.

When reviewing title, an attorney experienced in title matters if often engaged as many of these underlying docs are legal documents, which requires a legal expert.  In some cases, a civil engineer or surveyor may be brought in to confirm the locations of easements.  The review of title is critical so you can understand all of the encumbrances and ramifications of these underlying recorded documents.

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