Title Reports in California: What They Are, What to Look For, and Red Flags to Watch
Somewhere in the first week or two of escrow, a document lands in your inbox called a preliminary title report. It is full of legal descriptions, recording numbers, and language that appears specifically designed to be skimmed.
Please do not skim it.
The title report is where deals fall apart, and more importantly, it is where future problems announce themselves in advance, if anyone bothers to read it. This post explains what a California title report actually is, how to read the parts that matter, the red flags worth catching while you can still do something about them, and why almost nobody in your transaction is responsible for explaining any of it to you.
What a Preliminary Title Report Is
When escrow opens, the title company researches the property’s recorded history and produces a preliminary title report, which everyone just calls a prelim. It pulls together the property’s ownership history and shows who currently owns it, how they hold title, and everything recorded against the property: liens, deeds of trust, easements, restrictions, agreements, and other matters of record.
Here is the key concept that reframes the whole document. The prelim is not a clean bill of health, and it is not the title company telling you the property is fine. It is the title company’s offer to insure, and it lists the exceptions, meaning the things the title insurance policy will specifically NOT cover. Read that twice. Everything in the exceptions list is, by default, your problem after closing unless it gets cleared first.
That is exactly why you read it now, during escrow, while the seller still has both the obligation and the motivation to fix things. Once you close, your leverage evaporates, and that easement or unreleased lien becomes a souvenir you did not want.
How to Read It (The Three Parts That Matter)
A prelim looks intimidating, but the parts that matter for a buyer come down to three.
First, who owns it and how. The vesting section shows the current owner of record and the manner in which they hold title. It should match the person who is selling you the property. If it does not, you need to know why before you go further. If the seller is a trust, an LLC, an estate, or an individual whose co-owner died years ago, the right supporting documents need to exist to confirm the seller actually has the authority to sell. A trustee selling trust property needs to show their authority. An estate selling a deceased person’s home may need court documents. A surviving joint tenant needs a properly recorded death record. A mismatch here is not always fatal, but it always needs attention, and it is far better caught in week one than week four.
Second, the legal description. This is the technical description of the actual land being sold, by lot, tract, or metes and bounds. Confirm it matches what you think you are buying. This matters most with properties that include extra lots, unusual boundaries, or parcels that should be conveyed together. You would be surprised how often a buyer assumes the adjacent strip, the shared driveway, or the second lot is included when the legal description says otherwise.
Third, the exceptions. This is the heart of the report and where you should spend your attention. It lists property taxes, deeds of trust (mortgages), liens, easements, covenants and restrictions, recorded agreements, and anything else encumbering the property. Each numbered item references a recorded document, and you can request a copy of every single one of those documents. Serious buyers do exactly that. The one-line summary in the prelim tells you something exists; the underlying document tells you what it actually says and whether it affects you.
Red Flags Worth Catching
Some exceptions are routine. Others are warning lights. Here are the ones worth catching.
Liens that should not be there. The seller’s current mortgage will appear, and it gets paid off through escrow. That is normal and expected. What is not normal is old loans that were paid off years ago but never formally reconveyed, tax liens from the IRS or the state, judgment liens from a lawsuit against the seller, mechanics liens filed by contractors who say they were not paid, child support liens, or HOA liens. Each of these must be cleared before closing, and some take real time to resolve, especially anything involving a government agency or a contractor who has gone quiet. Finding them early is the difference between a smooth closing and a scramble.
Surprise easements. An easement gives someone else the right to use part of the property. Utility easements running along the edge of the lot are routine and usually harmless. But an access easement that lets a neighbor legally drive across the middle of your future backyard to reach their property is a very different thing, and you want to know exactly where every easement sits on the land before you commit. Pull the recorded easement document and, if it is not clear, look at the plat or survey. “There is an easement” and “there is an easement through the only flat spot where I wanted to build a pool” are not the same sentence.
Chain of title gaps. The chain of title is the unbroken sequence of ownership over the years. A gap, a deceased owner still on title, a deed from someone who arguably never owned the property, or a transfer that skips a step, can require legal work or even a court action to fix. These issues can stop a closing cold, and they are exactly the kind of thing that benefits from legal eyes early.
Restrictions that conflict with your plans. Recorded covenants, conditions, and restrictions, along with HOA rules and recorded agreements, can limit what you build, how you rent, what you park, and what you change. If your entire reason for buying is to add an ADU, run a short-term rental, or build a second story with a view, confirm that the recorded restrictions actually allow it before you fall in love with a plan the documents forbid.
Lis pendens. This is a recorded notice that the property is the subject of a pending lawsuit. It is a flashing red light. A lis pendens does not automatically kill a deal, but it absolutely needs legal attention immediately, because buying into active litigation is not something to do by accident.
What Most Buyers Miss
Buyers miss things on title reports for one simple structural reason: nobody in the transaction is actually responsible for explaining the report to them. The escrow officer is a neutral party and cannot give you legal advice. Your real estate agent is good at many things, but most agents are not lawyers, and interpreting recorded title exceptions is legal work. The title company is in the business of listing what it will not insure, not advising you about whether you should be worried about any particular item.
So the report gets delivered, a contingency clock starts ticking quietly in the background, and most buyers glance at it, see the word “preliminary,” assume it is a formality, and never request a single underlying document. Then years later, the easement, the restriction, or the unreleased lien resurfaces, almost always at the worst possible time, which is when they themselves are trying to sell and a new buyer’s attorney is reading the same report more carefully than they ever did.
Understanding the title report is one piece of a larger escrow puzzle, and it connects directly to inspections, disclosures, and contingency deadlines. If you want the bigger picture of how the whole process fits together, we walk through it in our guide to what to expect during escrow in California.
When to Get Help
A title report review is fast, inexpensive, and one of the highest-value things an attorney can do during your escrow. We read the report, pull the underlying documents that matter, explain in plain English what each significant exception actually means for you, flag anything that needs to be cleared before you close, and help you push to get it cleared while you still have leverage.
This kind of review is a core part of our real estate services, and it pairs naturally with the disclosure review and deed work that round out a clean, protected transaction.
In escrow and staring at a title report you do not fully understand? Send it to us.
Book a consult or send us a message. We will translate it into plain English and tell you exactly what, if anything, needs fixing before you close.
