How a Title Commitment Differs From a Policy – And Why Both Matter?

Written by Sankalp Title » Updated on: June 03rd, 2025

In the real estate industry, especially commercial transactions, understanding the difference between a Title Commitment and a Title Policy is important. For both buyers and sellers, these documents play key roles in protecting their investments. According to recent industry research, over 90% of real estate experts agree that understanding the nuances between these two documents can save time, money, and unnecessary legal complications. Here's why both the Title Commitment vs Title Policy matter, and how a top leading Title service company can guide you through this process.

What is a Title Commitment?

A Title Commitment is a preliminary report issued by a Title Insurance Underwriting Company, such as Sankalp Title, which provides an outline of the conditions under which a Title Insurance Policy will be issued. This report is a critical part of any real estate transaction. It's essentially the "blueprint" of the title's history and identifies any potential issues that could arise, including liens, claims, or other encumbrances on the property.

According to a 2019 National Real Estate Survey, nearly 87% of commercial real estate transactions involved some form of preliminary title report. This report helps identify any potential risks to the property title that need to be addressed before finalizing the sale. For instance, a title commitment will typically specify any unpaid mortgages, tax liens, or legal disputes that need resolution.

What is a Title Policy?

A Title Policy, on the other hand, is the actual insurance policy that protects the buyer and/or lender from any issues that may arise related to the property title after the transaction has been completed. This is the document that offers protection against unforeseen title defects, such as fraud, mistakes, or missing heirs, that weren't identified in the title commitment.

There are two types of title policies:

Owner's Title Policy – This protects the buyer's ownership rights.
Lender's Title Policy – This protects the lender's interest in the property.

Statistics show that 33% of commercial property purchasers experience post-purchase issues related to the property's title. These issues could result in legal battles, additional costs, and even the loss of the property. A title policy can shield you from these risks, offering you reassurance and security.

Key Differences Between a Title Commitment and a Title Policy

When it comes to real estate transactions, understanding the difference between a title commitment and a title policy is crucial. The buyer needs both documents to get a clear, marketable title. A title commitment outlines the title policy terms before the transaction is consummated. In contrast, a title policy is issued after the transaction is finalized, providing protection against future risks related to the title.

Below are the key differences between a Title Commitment and a Title Policy, helping you understand their distinct roles in securing your property investment:

Understand their distinct roles in securing your property investment:

Aspect	Title Commitment	Title Policy
Purpose	Preliminary report outlining conditions for issuing a policy.	Provides insurance against upcoming risks to the title.
Timing	Issued before the property transaction is completed.	Issued once the transaction is finalized.
Protection	Identifies existing conditions that must be resolved before policy issuance.	Offers protection against unforeseen legal issues after closing.
Coverage	Identifies potential issues that need resolution before policy issuance.	Covers losses or legal costs from title defects occurring before the policy's effective date.
Indemnification	No indemnification, just a commitment to give a policy.	Provides indemnification, covering legal fees and costs associated with title issues.
Types	N/A	Two types: Owner's policy (protects buyer) and Lender's policy (protects lender).
Continuous Protection	No continuous protection; valid for a limited period.	Provides continuous coverage for as long as the insured has an interest in the property.
Exceptions	Lists exceptions (liens, encroachments, easements) that must be addressed.	Provides coverage unless excluded by policy exceptions.
Conditions	Lists requirements (e.g., debt payment, lien release) for obtaining the policy.	No specific requirements once the policy is allocated.

Why Both Matter in Commercial Real Estate Transactions

In commercial real estate, where investments are often significant, these documents are even more critical. A recent study by Forbes Real Estate revealed that 75% of all commercial property transactions involve intricate title issues that require thorough review. Without a clear understanding of what's at stake, businesses risk facing financial and legal repercussions.

A Preliminary Title Report (or Title Commitment) can save you from purchasing a property with unaddressed issues. It's a proactive approach to ensure your investment is safeguarded before finalizing the deal. The Title Insurance Policy is your safety net after closing, covering any unforeseen problems that may arise.

For commercial real estate investors, the benefits of Title Insurance cannot be overstated. According to research, 80% of commercial investors who didn't purchase Title Insurance have experienced costly legal disputes post-purchase, costing them an average of $200,000 in legal fees and property claims.

With years of experience and a strong commitment to providing top-tier title services, Sankalp Title has earned its reputation as one of the most trusted providers in the industry. Specializing in commercial real estate transactions, Sankalp Title ensures the protection of your investment by offering thorough Title Commitments and robust Title Policies. Their expert team works closely with title insurance underwriting services to ensure that you understand every detail of both your Title Commitment and Title Policy, minimizing risk and maximizing success in your real estate transactions.

Why Choose Sankalp Title?

Choosing the right title company is a crucial step in ensuring a smooth and secure real estate transaction. Here's why Sankalp Title is the ideal choice for your title service needs:

Comprehensive Coverage: Sankalp Title offers detailed preliminary reports, ensuring no unexpected issues arise at closing.
Experience & Expertise: With over 20 years of industry experience, they bring unparalleled knowledge of commercial real estate and Title Insurance.
Customer-Centric Approach: Their team is committed to providing personalized guidance, addressing unique needs, and offering tailored solutions.
Reliable and Transparent: Clear communication and clarity are the basis of their procedures, delivering clients are continuously informed via the procedure.

Contact Sankalp Title for All Title-Related Matters

In the world of commercial real estate, understanding the differences between a Title Commitment and a Title Policy is essential. These two documents are critical to ensuring that your investment is fully protected, both before and after the transaction is completed. With Sankalp Title, clients can feel confident that their real estate transactions are secure and organized from start to finish.

For those seeking security and comprehensive protection for commercial property transactions, Sankalp Title is the solution you need. To learn more about their services and start a custom Title Commitment and Title Policy, contact us now!

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