3.28 Commitments

3.28.1

In General

Commitment for title insurance is the agreement by the title insurer to issue a title insurance policy subject to the terms and conditions of the commitment and the exclusions and requirements.

3.28.2

Issuance of Commitment

When the title company has received a bona fide order for title insurance, the title company may issue the commitment form promulgated by the Texas Department of Insurance.

According to Procedural Rule P-18, the title company must deliver a commitment to a proposed insured owner if:

  • The land is residential real estate (one-four family housing) that is in a recorded subdivision, on five (5) acres or less, or that is not over 200 acres to be used by individual insureds for agricultural production; or

  • An Owner Policy of not over $300,000 on other land (e.g., commercial or unimproved) will be issued; or

Delivery must be as soon as practicable and can be accomplished by mail, FAX or other means. Title companies can deliver to:

  • the proposed insured.

  • the proposed insured's agent (not the seller or broker).

  • other fiduciary of the proposed insured (e.g., attorney).

If none of these persons are available, delivery should be made to, or as instructed by, the person who placed the order.

The title company is not required to issue a commitment on an order that it is unwilling to insure or when the order is placed after the transaction is closed.

3.28.3

Composition of the Commitment Form

The commitment form is composed of:

  • Texas Title Information Sheet

  • Complaint Notice

  • Deletion of Arbitration Provision

  • Commitment Cover

  • Commitment Conditions and Stipulations

  • Schedules A, B, C, and D

3.28.4

Title Information Sheet

This information sheet is required as an enclosure in every commitment that is issued. It explains the title insurance process and the basic effect of the policy exceptions, exclusions, and conditions. The proposed insured is informed about common policy options such as survey coverage and deletion of the parties possession exception. Notice is given to the proposed insured about assistance available from both the Company and the Texas Department of Insurance.

3.28.5

Complaint Notice

This notice contains the Company's and the Department of Insurance toll-free numbers

3.28.6

Deletion of Arbitration Provision

This form is required as an attachment to the commitment if the policy to be issued is other than or in addition to the Texas Residential Owner Policy. The form is not necessary when the only policy to be issued is the Texas Residential Owner Policy because arbitration can only occur if the insured voluntarily agrees to it after a claim or dispute has arisen.

The Deletion of Arbitration Provision form outlines the arbitration process, discloses the existence of the arbitration provision in the standard owner and mortgagee policy forms, and gives the proposed insured the opportunity to request deletion of the exception.

3.28.7

Commitment Cover

The commitment cover contains both the insuring provisions and the condition and stipulations.

3.28.8

Insuring Provisions

The Company is committed to issue a policy to a specific insured upon the payment of premium subject to the requirements and exceptions in Schedule B and Schedule C of the Commitment. The policy will insure the interest in land described in Schedule A and the estimated premium for the policy and applicable endorsements is shown on Schedule D.

The Commitment is not valid unless the identity of the proposed insured and the amount of insurance are shown in Schedule A and it bears an authorized signature.

The liability and obligations of the Company end ninety (90) days from the issuance of the policy or at the time of the issuance of the policy whichever occurs first.

3.28.9

Conditions and Stipulations

The conditions and stipulations of the commitment relate to:

  • The actual knowledge of any defect, lien, encumbrance, adverse claim, etc., acquired by the proposed insured and not disclosed to the Company; and

  • The liability of the Company under the Commitment.

3.28.10

Schedule A Analysis

Forms: Example TX Commitment Schedule A Analysis 1.

Please refer to the form above for the Schedule A Analysis.

3.28.11

Schedule B Analysis - Exception From Coverage

Forms: Example TX Commitment Schedule B Analysis 1.

Please refer to the form above for the Schedule B Analysis.

3.28.12

Schedule C Analysis - Requirements

Forms: Example TX Commitment Schedule C Analysis 1.

Please refer to the form above for the Schedule C Analysis.

3.28.13

Schedule D Analysis - Independent Agents

Forms: Example TX Commitment Schedule D Analysis For Independent Agents 1.

Please refer to the form above for the Schedule D Analysis For Independent Agents 1.

 

See also Texas Bulletin TX2014007 - RATES AND/OR FORMS UPDATE Relating to New Schedule D.

3.28.14

Schedule D Analysis - Stewart Offices

Forms: Example TX Commitment Schedule D Analysis For Affiliated Offices 1.

Please refer to the form above for the Schedule D Analysis For Affiliated Offices 1.

 

See also Texas Bulletin TX2014007 - RATES AND/OR FORMS UPDATE Relating to New Schedule D.

3.28.15

Owner Title Policy Commitment to State Highway Department

In accordance with Rate Rule R-23 and Procedural Rule P-14 a premium charge shall be made of $200 to be paid within sixty (60) days of issuance of an Owner Title Policy Commitment or an Owner Title Policy Commitment for eminent domain proceedings to the State Highway Department. If title is conveyed to the State Department of Highways within thirty-six (36) months of issuance of the Commitment, a credit will be given on the Owner Title Policy. The same Company must issue the Commitment and the Owner Title Policy.

 

 

3.28.16

Commitment to or for the Benefit of Federal Deposit Insurance Corporation, Office of Thrift Supervision or Resolution Trust Corporation

A Commitment for Title Insurance may be issued to or for the benefit of the Federal Deposit Insurance Corporation, Office of Thrift Supervision or Resolution Trust Corporation or as its interests may appear. The Commitment must always be issued in the amount of $25,000. (Procedural Rule P-15).

In accordance with Rate Rule R-25, a premium equal to a $25,000 policy as specified in the then current promulgated Basic Rate for title insurance shall be charged. Only the agent licensed in the county where the property is located shall be paid the agent's portion of the premium.

The Commitment Form must be modified on Schedule C to provide that the Commitment is effective for one (1) year from its effective date. These provisions are not applicable to any commitment for title insurance issued in connection with a contract of purchase and sale to which FDIC, OTS or RTC is a party.