A condition that must be completed to the title insurer's satisfaction before it will issue the proposed policy.
A title requirement is a condition that must be completed to the title insurer’s satisfaction before it will issue the proposed policy.
Requirements commonly appear in Schedule B, Part I of an ALTA-style Title Commitment. State-promulgated and provider forms may organize them differently.
Mortgage approval and title readiness are separate. A borrower can be clear to close from a credit perspective while the property file still has an unsatisfied title requirement. The lender generally will not fund or authorize closing until the title provider can insure the required ownership and lien position.
Some requirements are routine closing steps: pay the purchase price, pay policy charges, execute the deed and security instrument, and record the required documents. Others address transaction-specific problems, such as an old mortgage, missing probate document, incorrect legal description, judgment lien, unpaid tax, or entity-authorization issue.
Not every requirement belongs to the borrower. The seller may need to clear a prior lien, the lender may need to supply instructions, the settlement agent may need to handle recording, or another party may need to execute a document. The closing team should identify the responsible party and evidence needed rather than leaving the item as a vague title condition.
After the title search, the provider issues a commitment that identifies proposed coverage and lists requirements and exceptions. The lender, title provider, settlement agent, buyer, seller, and their representatives work through the applicable requirements before closing.
The provider may mark an item cleared, satisfied, or to be satisfied at closing when acceptable evidence or arrangements are in place. A payoff requirement, for example, may be handled from closing funds rather than completed days in advance.
Requirements can change if the transaction changes or an updated search finds a new matter. The commitment itself may permit amendment, so borrowers should review the latest version and final closing instructions rather than rely only on an early copy.
| Requirement | Typical evidence or closing action |
|---|---|
| Establish current ownership and authority | Deed, probate, trust, entity, marital, or court documentation |
| Clear an existing lien | Payoff, release, satisfaction, reconveyance, or approved subordination |
| Resolve a document problem | Corrective deed, affidavit, or other accepted instrument |
| Pay transaction amounts | Purchase funds, premiums, taxes, fees, and authorized payoffs |
| Create the new lender’s interest | Properly executed mortgage or deed of trust |
| Complete public recording | Delivery and acceptance of required documents in the intended order |
A title commitment lists two transaction-specific requirements: pay and release the seller’s existing mortgage, and correct a misspelled owner name in an earlier deed. The settlement agent can arrange the mortgage payoff from sale proceeds, while the seller must obtain an acceptable corrective instrument for the name issue.
The file is not title-ready merely because enough money is available for the payoff. Both requirements must be handled to the title provider’s satisfaction before the proposed policies can be issued.
A title requirement differs from a Title Exception. A requirement is a condition to complete; an exception identifies a matter the policy will not cover or will cover only as stated.
It differs from a Title Defect. A defect is the underlying problem. A requirement describes what the title provider needs before proceeding.
It also differs from a mortgage underwriting condition. Both can delay closing, but a title requirement concerns ownership, liens, documents, or policy issuance rather than the borrower’s credit, income, assets, or loan eligibility.