How to Read a Preliminary Title Report on an Inherited Property

A preliminary title report, which everyone in this business just calls a prelim, is a title company's snapshot of the public record for one property. It shows who the county believes owns the home, how they hold it, and every recorded document that still clings to it: loans, liens, easements, tax matters, lawsuits. It is not a guarantee and it is not insurance. It is the title company telling you, in advance, what they will and will not cover when they eventually issue a policy to your buyer. That distinction matters, because the prelim is written for a future buyer and their lender, not for a grieving family trying to understand a parent's affairs. Reading it still gives you something nobody else in the process has at that moment: a complete, impartial list of what has to be dealt with before the house can change hands.

In my experience, the single most useful habit for an executor or administrator is to order the prelim within the first few weeks, long before there is a listing or a buyer. Most title companies in California will open a file and produce one for free or for a modest fee if you tell them a sale is coming, because they expect to earn the policy later. It usually arrives in a few business days to a week or two, depending on how old and how messy the chain of title is. The alternative, which I see constantly, is a family that lists the home, accepts an offer, opens escrow, and only then discovers a problem that takes six weeks to fix while the buyer's rate lock expires and their patience runs out.

I want to be clear about my role before we go further. I am a real estate specialist who has walked hundreds of families through probate and trust sales. I am not an attorney and not a tax advisor. What follows is educational: how to read the document, what the common problems look like, and who typically fixes them. Anything that touches a legal deadline, a creditor's rights, or a tax consequence needs to be confirmed with your probate attorney or CPA, because the rules have exceptions and they change. Think of this article as the orientation you wish someone had given you before the paperwork started arriving.

The first page or two of the prelim tells you how title is currently vested, meaning whose name the county has and in what form. Read this line slowly. For an inherited home it will often still show your parent's name, sometimes both parents' names even if one died twenty years ago, sometimes a trust, and sometimes a surprise: a sibling added as a joint tenant years back, or a former spouse never removed. The vesting tells you which legal path transfers the home. A deceased joint tenant usually needs an affidavit of death and a certified death certificate recorded. A property in a trust usually transfers through the successor trustee. A property in your parent's name alone almost always needs a probate court order or, for smaller estates, one of California's simplified procedures. Your attorney decides which path applies; the vesting line tells you both what the question is.

Next comes the legal description, the formal lot-and-tract or metes-and-bounds language that defines exactly what parcel is being conveyed. Families skip this, and I understand why; it reads like a surveyor's shopping list. But check that the address, the assessor's parcel number, and the description all agree, and that the description matches what your parents actually used. I have seen a detached garage sitting on a separately assessed parcel that was not on the report at all, and a family that nearly sold a home while leaving an adjoining strip of land orphaned in the estate. If anything about the lot looks unusual, a side yard that seems too wide, a shared driveway, a fence that wanders, flag it to the title officer and ask them to confirm.

The heart of the document is the list of exceptions, usually labeled Schedule B or something similar. These are the recorded items the title company will not insure against unless they are removed. Each is numbered and each cites a recording date and document number. Some are routine and stay on title forever, like current property taxes not yet due, standard utility easements, and recorded covenants for the neighborhood. Others are the ones this article is about: old deeds of trust, judgment liens, tax liens, lawsuits, and gaps in the chain of ownership. Read every exception, write down what each one is in plain words, and separate them into two columns: items that will stay and are harmless, and items that must be cleared. That second column is your checklist.

Finally, look for a section often called requirements or notes. This is where the title officer tells you what they need before they will insure a sale: certified letters from the court, a copy of the trust, a death certificate, a court order confirming the sale, a statement of information from each heir. Treat this section as the title company's own to-do list for your family. If something on it confuses you, call the title officer directly. They talk to executors every week, they are not paid by the hour, and in my experience they would far rather explain a requirement in month one than discover a missing document on the day of closing.

In California, a mortgage is usually recorded as a deed of trust. When the loan is paid off, the lender is supposed to record a reconveyance, a short document that releases the lien from the property. Lenders and their servicers do not always do this, especially for loans paid off decades ago, loans from banks that have since merged or failed, and private loans from relatives or small investors. The result is a prelim showing a deed of trust from 1988 for a loan your parents finished paying in 2003, still listed as an exception. It is one of the most common findings on inherited property and one of the most alarming to families, because it looks like a debt against the estate. Most of the time it is a paperwork gap, not money owed.

What the title company needs is evidence the loan was satisfied and a recorded release. The easy path is to find a reconveyance that was recorded later under a slightly different name or document reference, which a title officer can often locate in a few days. The medium path is to contact the current successor of the original lender and request a reconveyance, which can take several weeks to a couple of months, especially if the lender has changed hands. California also provides a process that allows a title company, after giving notice to the lender and receiving no objection, to record a release when the loan has clearly been paid. The specifics of that process and its timelines are for the title officer and your attorney to confirm, but the practical point is this: it is fixable, and it is slow, so start immediately.

Private deeds of trust deserve special attention. I have sat at kitchen tables where a family discovered their father had borrowed from a brother in the 1990s, secured by the house, and nobody knew whether it was ever repaid. Sometimes the lender is still alive and glad to sign a release. Sometimes the lender has died, and his own heirs now hold a claim nobody can value. Sometimes there is a handwritten note in a drawer that settles everything. If a private deed of trust appears, gather every scrap of related paperwork, bank records if you can find them, and bring it to the attorney before anyone contacts the other family. How that conversation is handled can preserve or destroy a relationship, and it can affect whether the item becomes a cleared exception or a creditor claim against the estate.

One more wrinkle: a deed of trust that is still genuinely active. If your parent had a current mortgage, a home equity line, or a reverse mortgage, those will appear and they are real. They will be paid from the sale proceeds at closing. What you want to do early is request a payoff statement or, for a reverse mortgage, understand the servicer's timeline, because those loans have their own clocks that keep running after a death. A current loan on the prelim is not a problem to clear. It is a number to know, so you can estimate what the estate will actually net and so nobody is surprised when escrow prepares the final settlement statement.

A lien is a recorded claim that attaches to the property as security for a debt. On an inherited home, liens come in two broad families, and the distinction matters for who pays and how. The first family is liens against the deceased or the property itself: unpaid property taxes, a tax lien from the IRS or the state, an unpaid contractor's mechanics lien from a remodel, a homeowners association lien for unpaid dues, or an abstract of judgment from a lawsuit your parent lost. These generally must be paid or resolved from the estate, typically out of the sale proceeds at closing. They reduce what the heirs share, but they rarely stop a sale. Escrow simply obtains payoff demands and pays them from the seller's side of the ledger.

The second family surprises everyone: judgment liens against an heir. When someone loses a lawsuit or stops paying a creditor who obtains a judgment, the creditor can record an abstract of judgment in the county. Under California law, that abstract generally attaches to real property the debtor owns or later acquires in that county. If one of your siblings has an old judgment, even from a credit card default fifteen years ago, it can attach to that sibling's share of the house once they acquire an interest in it, and in some situations title companies will flag it as soon as that sibling is identified as a beneficiary. The title company is not accusing anyone. It is protecting the buyer, who must receive the home free of every heir's personal debts.

Handling an heir's judgment lien is more about family dynamics than paperwork. Mechanically, escrow usually pays the judgment out of that heir's share of the proceeds, not the whole estate's, so the other heirs are not funding a sibling's creditor. Sometimes the judgment has expired, since California judgments have a renewal requirement, and the title officer can remove it with proof. Sometimes it was paid long ago and the creditor never recorded a satisfaction, which parallels the missing reconveyance problem. The uncomfortable part is that the heir's debt becomes visible to everyone at the table. I encourage executors to raise this privately with the affected sibling, early, with the prelim in hand, and frame it as a logistics item: here is what title shows, here is how escrow handles it, let us get a payoff figure.

There are also claims that do not appear as liens on the prelim but can still affect the estate. California's Medi-Cal estate recovery program can seek reimbursement from an estate for certain benefits a parent received, and creditor claims filed in the probate itself follow their own process and deadlines. Neither will show up as a recorded exception, which is why the prelim is one input to your attorney's picture, not the whole picture. My rule of thumb: everything recorded against the property belongs on the title checklist, and everything a parent owed that is not recorded belongs on the attorney's creditor checklist. Keep both lists, and do not assume a clean prelim means a debt-free estate.

Not every exception is a problem. Most inherited homes in California carry a handful of recorded items that will transfer to the buyer exactly as they are and that no one will ever remove. Utility easements are the classic example: the power company, the water district, or the phone company holds a recorded right to run lines across a strip of the lot and to enter to maintain them. Recorded covenants, conditions, and restrictions, called CC&Rs, govern what can be built or done in a tract or planned community and bind every owner. Old mineral rights reservations, where a developer decades ago kept the oil and gas under the lot, appear on prelims all over Southern California. These items are disclosed to the buyer, the buyer's lender accepts them, and the title policy simply lists them as exceptions to coverage.

The easements that deserve a closer look are the ones that affect how the property is actually used. A recorded access easement giving a neighbor the right to drive across your parents' land, a shared driveway agreement, a drainage easement that limits where anything can be built, or a view easement in a hillside neighborhood all change the home's value and its buyer pool. I ask the title officer for a copy of the recorded document for any easement that is not a standard utility strip, and I walk the property with it in hand. Where exactly does the easement sit? Is anything built on it? Is the neighbor using it? A buyer will ask these questions, and an executor who already knows the answers is in a far stronger position than one who learns them from a buyer's inspector.

Occasionally an easement or agreement on the prelim no longer reflects reality. The neighbor's access road was abandoned forty years ago and a fence now runs through it. A shared well agreement references a well that was capped when city water arrived. An old road easement to a parcel that has since been merged. These do not necessarily need to be cleared to sell, but they create confusion and sometimes negotiating leverage for a buyer. Whether to leave them, obtain a recorded release from the benefited party, or simply disclose them clearly is a judgment call that depends on how much they affect value and how cooperative the neighbor is. Your attorney and the title officer can advise; my job in these cases is usually to tell you honestly whether buyers in that neighborhood will care.

The quietest problems on a prelim are gaps in the chain of ownership, and they are common precisely because nobody was looking. The most frequent is a predeceased spouse still on title. Your mother died in 2009, your father never recorded anything, and now the county still shows both names as joint tenants. The fix is usually straightforward: a recorded affidavit of death of joint tenant with a certified death certificate removes her name. But it must be done, and the family must locate a certified copy of a death certificate that is now many years old. If your parents held title as community property or as tenants in common rather than joint tenants, the path can differ and may require its own court step, which is exactly the kind of distinction to confirm with your attorney rather than assume.

A second common gap is a trust that was signed but never funded. Your parents paid an attorney to create a living trust, received a handsome binder, and the attorney or the family never recorded a deed transferring the house into it. The prelim shows the home in your parents' individual names while the trust says it owns everything. In California there is sometimes a court procedure to confirm that an asset belongs to a trust when the intent is clear, and it can be far faster than a full probate. Whether your situation qualifies, and what evidence the court will want, is a legal question. From the title side, the point is that the discrepancy will be caught, and it is better caught by you in the first month than by a buyer's title officer in escrow.

Then there are name problems that sound trivial and are not. A parent who went by a middle name, a maiden name on the deed and a married name on the death certificate, a misspelling by a 1970s escrow clerk, a Jr. and Sr. with identical names at the same address. Title companies resolve many of these with a statement of information, a form each party fills out listing former names, addresses, and marriages so the title officer can distinguish your parent from strangers with similar names, and so judgments against those strangers do not land on your file. Fill these out promptly and completely for every heir and for the deceased. In my experience, the statement of information is the single most delayed document in a probate escrow, and it is the easiest one to finish early.

If the vesting shows someone unexpected, a sibling added as a joint tenant, a caregiver, a second spouse, a business partner, stop and call the attorney before you do anything else. That person may hold a real ownership interest that passes outside the estate entirely, or the deed may be challengeable, and either way it changes who must sign, who receives proceeds, and sometimes whether the home can be sold at all right now. This is the one category where I urge families not to pick up the phone and confront anyone, however justified the anger feels. Document what the prelim shows, gather the recorded deed, and let counsel decide how to proceed. Title problems are solvable. Family ruptures from an unplanned confrontation often are not.

Once you have read every exception and requirement, the prelim stops being an intimidating document and becomes a project plan. I ask executors to build a simple table: one row per exception or requirement, with four columns. What is it in plain words. Does it stay or must it be cleared. Who owns the fix: title officer, attorney, escrow at closing, or the family. And what is the next concrete action with a date. A missing reconveyance becomes: title officer to request release from successor lender, follow up in two weeks. A sibling's judgment becomes: executor to speak with sibling, obtain payoff figure, escrow to pay from that share. A requirement for certified letters becomes: attorney to provide once issued by the court. Writing it down removes the dread, because every line has an owner and a next step.

Share that table, in some form, with the people who need it. Your attorney needs to know what title found so they can coordinate creditor claims and court timing with it. Your title officer needs to know what the family has located, especially death certificates, payoff letters, and old loan documents. Your agent, if you have engaged one, needs to know what will be disclosed to buyers and what might still be in progress at listing. In my experience the estates that close smoothly are not the ones with clean prelims. They are the ones where the executor, the attorney, the title officer, and the agent were all looking at the same list by the second month, so no one was surprised and nothing fell between roles.

Expect the report to change. A prelim is a snapshot, and title companies update it as documents are recorded and as the sale approaches. A judgment may be renewed or satisfied. A reconveyance you requested will appear. Sometimes a new item surfaces, like a lien recorded against an heir after the first report. Ask the title officer for an updated prelim before you list and again when you open escrow, and reread it each time against your table. Most updates will be lines falling off your must-clear column, which is a genuinely good feeling in a process with few of them. The occasional new item is far easier to absorb when the rest of the list is already handled.

If you are reading this with a parent's house sitting empty and a prelim you do not fully understand, I am glad to help you make sense of it. That can be as simple as a conversation to orient the family on what the exceptions mean and which ones matter, practical help keeping the property secure, insured, and maintained while the estate moves, or an introduction to probate attorneys I have watched handle exactly these problems well for other families. There is no obligation attached to any of that. Most families only do this once, and no one should have to learn to read a title report alone in the middle of grieving.