Preliminary Title Report in California: What It Shows and How to Review It

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

A preliminary title report ("prelim") is the title company’s offer to issue a title insurance policy on the property you are buying, subject to the exceptions it lists. It shows who holds title now, the liens that must be paid at closing, and the easements, CC&Rs and other recorded matters that will stay with the property. Under California law it is not a guarantee of title and not an abstract, so the job of a buyer is to read every exception during the contingency period and object in writing to anything that isn’t acceptable.

What a prelim is, legally

California’s Insurance Code defines a preliminary report as an offer to issue a title policy subject to the exceptions it lists and the matters it incorporates by reference. It is not an abstract of title, and it is not a representation of the condition of title (Insurance Code 12340.11). An abstract, by contrast, is a written list of recorded documents in the chain of title that the person ordering it is meant to rely on (Insurance Code 12340.10).

That distinction matters. When an owner’s policy is offered, the prelim must carry a bold front-page notice telling you to read the exceptions and exclusions carefully because those matters are not covered, and that the report may not list every lien, defect or encumbrance (Insurance Code 12414.30). In other words, the prelim tells you what the insurer will and won’t insure. It does not promise that nothing else exists.

Don’t confuse the prelim with the Department of Real Estate’s "Preliminary Public Report," which is a separate disclosure for new subdivisions and says nothing about title exceptions (DRE form RE 603D).

The parts of a prelim

Layouts differ by title company, but most California prelims contain the same building blocks.

Section	What it tells you	What to check
Cover page and effective date	The date the title search runs through, the order number, the proposed policy types and amounts	Is the effective date recent? Does the proposed owner’s policy amount match your price?
Vesting	Who holds title today and how	Does the seller’s name match the purchase agreement, or is the seller a trust, estate or entity that needs added paperwork?
Legal description	The land being insured, by lot, tract, parcel map or metes and bounds	Does it match the APN, the parcel you toured and any extra lots or access strips?
Schedule B exceptions	Everything the policy will not cover: taxes, assessments, easements, CC&Rs, leases, liens	Read each item and the underlying document
Requirements	What the title company needs before it will insure: payoffs, reconveyances, trust or entity documents, statements of information	Make sure the seller can deliver these before closing
Notes, plat map and exhibits	Tax amounts, informational notes, a location map, the standard exclusions	Look at the map with the easements in mind

Vesting

Vesting shows the current owner exactly as title is held, for example a married couple as community property, a trustee of a living trust, an LLC or an estate. If a trustee, executor or LLC manager is selling, the title company will list what it needs to confirm that person’s authority. How you will take title is a separate decision; see our guide to how to hold title in California.

Schedule B exceptions

This is the heart of the report. Typical items include:

Property taxes and assessments. The current year’s taxes, any special assessments or community facilities district (Mello-Roos) liens, and the lien of supplemental taxes. Supplemental bills arrive after closing and are your responsibility; see supplemental tax bills and Mello-Roos in California.
Easements. Rights of others to use part of the property, such as utility lines, a neighbor’s shared driveway, drainage, or road access on rural parcels in Sonoma, Napa and Mendocino counties. The prelim gives the recording reference; the document says where the easement runs and who maintains it.
CC&Rs and other restrictions. Covenants, conditions and restrictions recorded against the tract or the HOA. In a condo or planned development, read them alongside the HOA documents.
Deeds of trust and other liens. The seller’s loans, home equity lines, judgment liens, tax liens and mechanics’ liens. These normally appear with a requirement that they be paid and released through escrow.
Leases, agreements and notices. Recorded leases, solar or other equipment financing filings, notices of code violations, lis pendens (notice of a pending lawsuit) and similar items.

How to read the exceptions in practice

Order every underlying document. The prelim summarizes; the recorded document controls. Ask the title officer or escrow officer for copies of every listed exception, and the plat map. Recorded documents can also be ordered from the county. Sonoma County’s online official records index runs from 1964 forward, and copies are bought through the Clerk-Recorder’s self-service site because state law bars displaying recorded documents online (Sonoma County Clerk-Recorder). Marin County’s grantor/grantee index covers 1973 to the present (Marin County Assessor-Recorder).
Locate easements on the ground. Compare the easement descriptions with the parcel. An easement through the area you planned for an ADU, pool or barn matters more than one along a lot line.
Separate liens from permanent matters. Liens and loans should be paid off and removed at closing. Easements, CC&Rs and most recorded agreements will stay. Ask escrow to confirm each lien has a payoff demand.
Note anything unexpected. A lis pendens, a mechanics’ lien, a notice of violation or an unreleased old loan can delay closing.
Ask about coverage. Your title officer can explain which exceptions may be removed, insured over or covered by an endorsement. On request, a title insurer may agree to cover loss from monetary liens listed in the prelim, under the policy’s terms (Insurance Code 12414.30).

Discriminatory covenants in older CC&Rs

Older North Bay and San Francisco subdivisions sometimes carry recorded restrictions based on race or other protected traits. Those provisions are void. When a county recorder, title company, escrow company, real estate licensee or association provides a copy of a deed or governing document, it must add a cover page or stamp saying so, and explaining that the language can be removed by recording a Restrictive Covenant Modification with the county recorder (Government Code 12956.1). Sonoma County’s Clerk-Recorder lists the Restrictive Covenant Modification among its recorder services.

Objecting within the contract timeline

Your purchase agreement, not the prelim, sets the rules for reviewing title. It says when the seller must deliver the prelim, how long you have to review it, and how to remove the contingency or ask the seller to correct an item. We don’t repeat form day counts here, because they depend on the form version and what you negotiated. Read the California Residential Purchase Agreement guide, then count your actual dates with the contract deadline calculator.

In practice:

Get it early. Escrow normally orders the prelim when it opens. Ask for it, the exception documents and the plat map in the first days; see the California escrow timeline.
Object in writing. If an exception is a problem, put the request in writing before your review period ends: remove a lien, obtain a release, record a correction, or get an endorsement.
Decide before the deadline. If the seller can’t or won’t fix it, your options depend on the contract. If you have to cancel, follow the steps in how to cancel a home purchase.

A prelim also gets updated. If closing is delayed, ask for an updated report so new filings don’t surprise you.

How the prelim relates to title insurance

The prelim is the offer; the policy issued at closing is the contract. Schedule B exceptions from the prelim usually carry into the policy unless they are removed or insured over. The California Department of Insurance explains that title insurance is a one-time premium paid at closing, that the owner’s policy protects you while a lender’s policy protects only the lender, and that rates and forms must be filed with the Insurance Commissioner (CDI title insurance guide). When the policy arrives, CDI suggests checking that the amount matches your price, the effective date matches closing, and the policy describes all the property you bought.

For policy types, endorsements and who customarily pays in Northern California counties, see our title insurance guide. The prelim is not a substitute for a survey, an inspection or the natural hazard disclosure report; it covers recorded matters, not physical condition.

Questions people ask

Who orders the preliminary title report?

Escrow or the title company usually orders it when escrow opens, under the title and escrow choices in your purchase agreement. The seller’s side often provides it, but your agreement controls.

Is a preliminary title report a guarantee that title is clear?

No. California law says it is an offer to insure, not a representation of the condition of title, and that it may not list every lien or defect. The protection comes from the title policy issued at closing.

What is Schedule B on a prelim?

Schedule B lists exceptions: matters the policy won’t cover, such as taxes, easements, CC&Rs and recorded agreements. Liens there are usually paid off at closing; most other items stay with the property.

Can I object to an easement or CC&R?

You can ask the seller to address it in writing within your contract’s review period. Many easements and CC&Rs can’t be removed by the seller, so the practical choice is often to accept, renegotiate or cancel as the contract allows.

What happens to the seller’s mortgage that shows on the prelim?

It is normally paid from the sale proceeds through escrow and released. The prelim lists it as an exception and a requirement until that happens.

How do I see the documents behind each exception?

Ask the title officer for copies, or order them from the county recorder using the recording reference. In Sonoma County, copies are purchased through the Clerk-Recorder’s self-service site.

Why does my prelim list a strange restriction from the 1940s?

Older CC&Rs sometimes contain discriminatory covenants. They are void under California law, and an owner can record a Restrictive Covenant Modification with the county recorder to remove the language.

Sources & notes

Statute text was read on a public mirror of the official code; links go to leginfo.legislature.ca.gov. C.A.R. purchase agreement forms are member-only, so this page gives no form paragraph numbers or default review periods. Section layout of a prelim varies by title company. Questions about a title insurer can go to the California Department of Insurance consumer hotline listed in its guide.

General information, not legal, tax or lending advice. Updated November 2026. Primary sources are linked in this guide.

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