In a California purchase, you usually do not order a preliminary title report yourself: once escrow opens, the escrow officer or your lender places the order with a title company, and the report comes back within one to three business days. If you want one outside of a transaction, you can call any licensed California title company directly and request it. Either way, the document lists the current owner, the legal description, and every recorded claim against the property, along with the conditions the title company will require before it insures the deal.
How to Order the Report
Inside an open escrow, the request happens automatically. The escrow officer sends the property information to the title company selected for the transaction, and the report feeds directly into closing. Residential reports generally arrive in one to three business days. Properties with long ownership histories or layered commercial titles take longer.
Outside of escrow, you contact a title company on your own. This is common when you are researching a property before making an offer, setting up a private sale, or weighing a refinance. The title company will ask for three pieces of information:
- The street address of the property.
- The legal description, which is the formal boundary identification recorded with the county. It differs from the street address and appears on any prior deed or on the county recorder’s website.
- The Assessor’s Parcel Number (APN), the identifier the county uses for property tax records. It appears on the property tax bill.
Residential preliminary title reports generally cost between $75 and $250. Commercial reports run higher and can exceed $1,000 for properties with complex ownership structures. In a purchase transaction, the cost is usually folded into the broader title and escrow fees rather than billed separately.
What the Report Actually Is
California Insurance Code 12340.11 classifies a preliminary title report as an offer to issue a title insurance policy, not a representation about who owns the property or whether title is clean.1California Legislative Information. California Insurance Code 12340.11 – Preliminary Report, Commitment, or Binder That distinction matters. The title company is telling you what it found in the public record, what it is willing to insure around, and what it will not cover. The report is not an abstract of title, and the legal duties that apply to preparing an abstract do not apply here.
The report is produced after a search of recorded documents at the county recorder’s office: deeds, mortgages, liens, judgments, and easements. Everything found gets sorted into two buckets: requirements you must satisfy before closing, and exceptions the final policy will not cover. Read it as a punch list.
Reading the Report
Schedule A: Ownership and Legal Description
Schedule A identifies the current owner and how title is held. Title professionals call this the vesting, and it controls who has authority to sign the deed. Property held as community property requires both spouses to sign. Property held in a living trust requires the trustee. If the vesting does not match the seller you have been negotiating with, that gap must be resolved before closing.
Schedule A also carries the full legal description. Compare it against your purchase contract and any survey you have. Discrepancies can point to boundary confusion or errors in prior recordings, and catching them before closing is far cheaper than fixing them after.
Schedule B: Requirements and Exceptions
Schedule B is where the actionable material sits. Requirements are conditions you must meet before the title company will issue the policy. The most common one is paying off the seller’s existing mortgage so the lender releases its deed of trust. You may also see requirements to obtain an HOA clearance certificate, record a corrective deed, or clear a judgment lien.
Exceptions are recorded interests the title company found in the public record and is declining to insure against. They will appear on the final policy as items not covered. Some are routine, like standard utility easements. Others can change what you are actually buying. The skill in reviewing a prelim is telling the two apart.
What You Might See on Schedule B
CC&Rs and HOA Restrictions
If the property is in a planned development, condominium project, or any HOA-governed community, the report will list recorded Covenants, Conditions, and Restrictions. Under California Civil Code 4250, these declarations define the development and impose use restrictions on every owner. They run with the land and bind you even though you never signed them. Read them before closing for limits on rentals, exterior modifications, business use, or pets that could clash with your plans.
Deeds of Trust
A deed of trust securing the seller’s existing loan is the lien you will see most often. In practice, it is handled at closing: escrow collects the sale proceeds, pays off the loan balance, and the lender records a reconveyance releasing its claim. The title company will not issue a policy until that reconveyance is confirmed.
Property Tax Liens
Every California property carries a lien for current and future property taxes. These liens have priority over nearly every other recorded interest, so the taxing authority is paid first if the property goes to foreclosure. Delinquent taxes appear as a requirement to be cleared before the policy issues. Current-year taxes usually appear as a standard exception because the final amount is not yet fixed.
Federal Tax Liens
When the IRS files a Notice of Federal Tax Lien against a property owner, the lien attaches to all of that person’s property, including real estate. A federal tax lien on the prelim is a serious red flag. It must be paid off, or the IRS must agree to subordinate its claim, before the title company will insure around it. The IRS does offer a formal subordination process that lets other creditors move ahead of the federal lien, which can help when the seller is working out a payment arrangement.2Internal Revenue Service. Understanding a Federal Tax Lien Expect delays.
Mechanic’s Liens
Contractors, subcontractors, and material suppliers who worked on the property and were not paid can file a mechanic’s lien under California Civil Code sections 8400 through 8424. These liens can relate back to the date work first began, which sometimes gives them priority over liens recorded later. If you are buying a recently renovated property, review this section carefully. The seller’s assurance that everyone was paid is not the confirmation that matters; the absence of a lien on the prelim is.
Easements
An easement gives someone other than the owner the right to use part of the property for a defined purpose. California Civil Code 887.010 defines it as a burden on the land allowing the holder to perform specific acts upon it.3Justia Law. California Civil Code 887.010-887.090 Utility easements are the most common type and rarely affect day-to-day use. Shared driveway easements, drainage easements, or access easements benefiting neighboring parcels deserve closer attention. If one runs through the area where you planned an addition, you need to know before closing.
Lis Pendens
A lis pendens is a recorded notice that a lawsuit affecting the property is currently pending. Under California Code of Civil Procedure 405.24, it puts potential buyers on constructive notice that the outcome could affect ownership. In practical terms, it makes the property effectively unsellable until the litigation resolves or a court expunges the notice. Most buyers walk away when one appears. The risk that a future judgment could unwind the purchase is not something a title company will insure against.
Fixing Problems the Report Reveals
Finding a problem on the prelim does not kill the deal. It defines the work to be done. Most California purchase contracts include a title contingency period that gives you a window to review the report and either resolve issues or cancel the contract without penalty.
Lien Payoffs
The most straightforward fix. Existing mortgages, unpaid taxes, and judgment liens are paid off through escrow at closing: the title company collects sale proceeds, pays the liens in priority order, and records the releases. Make sure payoff demands are current and include per diem interest through the expected closing date. Stale payoff figures are one of the most common causes of last-minute closing delays.
Name and Document Corrections
Misspelled names, incorrect legal descriptions, or missing signatures on prior deeds create clouds on title. Correcting them usually requires a corrective deed or affidavit signed by the appropriate parties and recorded with the county. If the person who made the original error is available and cooperative, the fix is quick. If they are unreachable or deceased, you may need a court order.
Quiet Title Actions
When a defect cannot be resolved through negotiation or paperwork, a quiet title action may be needed. Under California Code of Civil Procedure 760.020, anyone with a claim to real property can file a court action to establish title against adverse claims.4California Legislative Information. California Code CCP 760.020 Common triggers include disputed ownership after a death, competing claims from unknown heirs, and stale liens from lenders that no longer exist. Attorney fees typically run from $1,500 to $5,000, and the timeline can stretch from a few months to over a year if anyone contests.
Easement Disputes
If the report reveals an easement that interferes with your planned use, your pre-closing options are limited to negotiating with the easement holder for a modification or release, or walking away under the title contingency. Resolving easement concerns before you close is almost always the better path than trying to litigate them afterward.
How the Report Connects to Title Insurance
The preliminary title report is the precursor to two separate title insurance policies. A lender’s policy protects the bank funding your loan and is required if you are borrowing. An owner’s policy protects you for as long as you own the property and covers losses if someone later asserts a valid claim against your title.5California Department of Insurance. Title Insurance California has no law dictating who pays for either policy; it is set by local custom and flips between Southern and Northern California, so nail the arrangement down in the purchase agreement rather than assuming.