I understand that Title Search is basically the search performed on the property to uncover liens and so forth. And title commitment is basically a title search conducted by the title company with a “promise” to insure the title.
The new Texas law affecting Sub2 deals, the law states that it does not apply if Title Insurance or Title Commitment was purchased/used. Could that be interpreted as having Title Search would act as Title Commitment?
I talked to the branch manager of my title company and she said she can do title search for me and not issue the insurance if I like, which I can get cheaper online. but I want to make sure that is sufficient to cover the law.
From what you have wrote, I would say a Title Search is different from Title Commitment. The real answer will come from a local attorney, but that will opinion be his opinion because there is no case law on the subject. The best place for now would be the regulatory agency responsible for this area. They are the ones who decide how to enforce the law.
I believe the intent of the law is to stop the sale/purchase using the sub 2 tool. When buying sub 2 the title company usually insures around or you are signing a hold harmless statement releasing the title company from any liability for “your” sub2 purchase. At that point the real question is do you Now have title insurance ? Yes you do. Title commitment or insurance is not a fool proof blanket for purchasing/selling. The insurance offered at times may and do have “acceptions” meaning we are not blessing your purchasing activity but the status of the title. The law makers, I believe, have assumed you/me/us would not be able to get title insurance or a commitment using a sub2 purchase agreement. This is not the case as we know. It is the level of experience of the title company that disallows the use of sub2 purchases.
Title search is not title commitment…title commitment is not title insurance…no title insurance is foolish.
I believe the law is designed to have some other regulated agency to watch over the transactions other than the government. Some people do not get insurance and file the deals at the county and take advantage of sellers creating problems for all of the honest investors here !!! Hope this helps,
I think a title committment is a formal step by the title company stating that they have done the work to their satisfaction and commit to write a title policy on the property so that closing can occur. the actual title policy comes in the mail later.
so, the chain is: title search, title committment, title policy.