White Paper · Real Estate · Illinois

Title Commitments Decoded: Reading Schedule B Before You Close

The document buyers never read is the best map of the property’s legal risks. Schedule B decides what the insurer covers, and what it hands to you.

By Lincoln Square Law · 8-minute read

A few weeks before closing, a document arrives that most buyers never read: the title commitment. It is dense, full of recording numbers and legal descriptions, and it looks like something only lawyers and lenders need. In fact it is the best single map of the legal risks attached to the property, and it tells you in advance exactly what the title insurance policy will cover and what it will not. The part that matters most is Schedule B.

What a commitment is

A title commitment is the title insurer’s promise to issue a policy once stated conditions are met. It is not the policy itself. Title insurers doing business in Illinois are regulated under the Title Insurance Act (215 ILCS 155), and most commitments follow the standard American Land Title Association format. The commitment is based on a search of the public records, which in Cook County are maintained by the County Clerk’s Recordings Division. Recording matters because an Illinois deed or mortgage generally takes effect against later purchasers and creditors from the time it is filed for record (765 ILCS 5/30). The commitment is essentially a report of what that search found, organized by what must be done and what will be excluded.

Schedule A: who, what, and how much

Schedule A identifies the effective date of the search, the proposed policy or policies and their amounts, the proposed insured (you as owner, your lender, or both), the interest being insured, the current owner of record, and the legal description of the land. Read it for accuracy first. Names should match the contract and your loan documents exactly. The legal description should match the property you are buying, including any parking space or storage unit in a condominium. The current owner should match the seller. A mismatch here can signal anything from a clerical error to a missing heir or an unrecorded transfer.

Schedule B, Part I: requirements

Part I lists what must happen before the policy will issue. Typical requirements include payment and release of the seller’s mortgage, recording of the deed, payment of any recorded liens or judgments, evidence of authority when the seller is a trust, corporation, or estate, and releases of old matters that still appear of record. Each requirement is a task someone has to complete, usually the seller or the seller’s attorney, before closing. If a requirement cannot be met, the closing may not happen on time, or the insurer may refuse to issue the policy without an exception for that matter.

Buyers should pay particular attention to requirements that involve people or entities other than the seller: an ex-spouse who must sign, a prior owner’s estate, a contractor’s lien, or a judgment against someone with the same name as the seller. These take the longest to resolve.

Schedule B, Part II: exceptions

Part II lists what the policy will not cover. This is the heart of the document, because anything listed here becomes your risk after closing rather than the insurer’s.

Standard exceptions appear in almost every commitment. They typically exclude rights of parties in possession, matters an accurate survey would show, unrecorded easements, mechanics’ lien claims not yet of record, and taxes not yet due. Many of these can be removed, often called extended coverage, when the insurer receives the right documents: a survey, affidavits from the seller, and, for recent work on the property, proof that contractors were paid. Illinois mechanics’ lien law explains why the last point matters: a contractor can record a lien after the work is done, and within the statutory period that lien can reach a subsequent purchaser (770 ILCS 60/7).

Special exceptions are specific to the property. They commonly include:

• Recorded easements for utilities, access, or shared driveways.
• Covenants, conditions, and restrictions, including building lines and use restrictions.
• Condominium or homeowners association declarations and the assessments they authorize.
• Real estate taxes. In Cook County, taxes are billed a year in arrears, so the commitment will show general taxes for the current and prior years as an exception, and the contract’s tax proration determines who bears them.
• Special assessments and special service area taxes that apply to the property.
• Encroachments or boundary issues shown on a survey.

Not every exception is a problem. A standard utility easement along the rear lot line rarely affects anyone. A recorded restriction that prohibits the addition you plan to build, an easement running under the garage, or an unreleased mortgage from a prior owner is a different matter.

Reading the survey alongside the commitment

The commitment tells you what is recorded. The survey tells you what is on the ground. Reading them together is where many problems surface: a fence that sits a few feet onto the neighbor’s lot, a garage built over a recorded utility easement, a driveway that crosses a property line, or a building that violates a recorded building line. Each of those can affect resale, financing, and future improvements. When the survey shows a discrepancy, the question is whether the insurer will cover it, whether the seller will fix it, or whether the price or terms should change. In a condominium, the plat and the declaration play the role the survey plays for a house, and the parking and storage rights described there should match what you believe you are buying.

How exceptions get addressed

There are several ways to handle an exception that matters. Some can be removed outright: a paid-off mortgage can be released, a stale lien can be cleared, and standard exceptions can be deleted with a survey and affidavits. Some can be covered by an endorsement, which is an add-on to the policy that insures over a specific risk. Some can be insured over, meaning the insurer agrees to cover the matter despite its appearance of record, often in exchange for an indemnity from the seller. And some cannot be fixed, in which case the question becomes whether you still want the property on those terms.

Timing matters. Residential contracts in the Chicago area typically set a deadline for the buyer to raise objections to title after receiving the commitment and survey, and give the seller time to cure. Missing the objection window can mean accepting matters you would have wanted resolved.

Owner’s policy and lender’s policy

If you are financing, your lender will require a lender’s policy, which protects the lender’s loan. It does not protect you. The owner’s policy protects your ownership interest, generally in the amount of the purchase price. Under customary Chicago-area residential practice, the seller typically provides the owner’s policy, but the contract controls, and the allocation of title charges should be confirmed during attorney review.

The closing itself

Before closing, the title company updates the search to pick up anything recorded since the commitment date. Illinois requires title companies to handle closing funds under good-funds rules so that money is actually available before it is disbursed (215 ILCS 155/26). After closing, the deed and mortgage are recorded, and the final policy issues based on the commitment as updated and cleared. Comparing the final policy with the commitment you reviewed is a simple step that catches errors.

A reading checklist

• Confirm names, the interest insured, the policy amounts, and the legal description on Schedule A.
• List every Part I requirement and who is responsible for each one.
• Read every Part II special exception and pull any recorded document you do not understand.
• Ask which standard exceptions will be removed and what documents are needed to remove them.
• Match the survey against the easements and restrictions in Part II.
• Calendar the contract’s title objection deadline.
• Review the final policy against the cleared commitment after closing.

The commitment is written for insurers and lenders, but it is really a buyer’s document. Reading it before closing is the difference between choosing the risks you accept and discovering them later.