Reading a Preliminary Title Report Before You Buy Central Coast Land

You are in escrow on a piece of land, or a home on acreage, somewhere in San Luis Obispo County. A document called a preliminary title report has arrived, and it is a dense list of recorded instruments, document numbers, and legal descriptions. It is also the single most informative thing you will receive about what you are really buying. Here is how we read one with clients, and what we look for on Central Coast property in particular.

AN OFFER TO INSURE, NOT A GUARANTEE

What the prelim is and is not

The preliminary title report, or "prelim," is the title company's statement of what they found when they searched the public record for the property, and the conditions under which they will insure it. It is not a guarantee, and it is not the policy. It is an offer: we will insure this property, subject to these exceptions.

That distinction matters. Anything listed as an exception is something the eventual policy will not cover. If you do not like an exception, escrow is the time to address it.

After close, it is simply part of your property. Our post on title insurance, explained covers how the policy itself works.

VESTING · SCHEDULE A · SCHEDULE B · REQUIREMENTS

Walking through the report

Prelims are organized in a fairly standard way. We take them in this order.

The vesting and legal description

First, confirm who owns the property according to the record, and how. The seller named in your contract should match the vested owner. If the property is held in a trust, an LLC, or an estate, the person signing needs authority to do so, and escrow will require documentation.

Then read the legal description. On land, it may be a lot in a recorded subdivision, a parcel from a parcel map, or a metes-and-bounds description that reads like a treasure map. Confirm it matches the acreage and location you think you are buying. We have seen buyers discover that the "40 acres" in the listing is two legal parcels, or that the parcel line does not run where the fence runs.

Schedule A

This states the estate being insured, usually a fee simple interest, and the proposed insured amount. Straightforward, but check it.

Schedule B: the exceptions

This is the heart of the document. Each numbered item is a recorded matter the title company found and is excluding from coverage. On Central Coast land, the exceptions that come up most often are:

Property taxes and assessments. Standard, but note any special assessments or bonds tied to the parcel.

Easements. Utility easements are routine. Road easements, access easements across neighbors, and easements benefiting neighbors across your parcel are not routine; they define who can drive where.

Each one references a recorded document, and you should get copies. Our post on easements, shared wells, and private roads explains how these arrangements work in daily life.

Covenants, conditions, and restrictions. Even rural land can have recorded restrictions from an old subdivision or a planned development. They may limit uses, structures, or animals.

Williamson Act contracts. Much of the county's agricultural land is under a Williamson Act contract, which offers property tax benefits in exchange for keeping land in agricultural or open-space use. It runs with the land and restricts what you can build and how you can split it. Confirm the status and read the contract; it is a fundamental fact about the property.

Mineral, water, or oil and gas rights. Older deeds sometimes reserved these to a prior owner. On most residential land it is a curiosity; on some parcels it matters.

Deeds of trust and liens. The seller's existing loans will be paid off at close. Anything else, such as a mechanic's lien, a judgment, or a tax lien, needs to be resolved before you take title.

Road maintenance and shared well agreements. These are the practical documents that govern rural life. Read every word.

Coastal or planning conditions. Properties in the Coastal Zone or with past discretionary permits may have recorded conditions, deed restrictions, or open-space easements. See our overview of Coastal Commission basics for buyers west of Highway 1.

Survey and boundary matters. Standard policies except anything a survey would reveal. On land where fences, roads, or structures might straddle a line, we discuss a survey and extended coverage.

Requirements and notes

At the end, the title company lists what it needs before close: payoff demands, trust certifications, corrected documents, releases of old liens. This is escrow's checklist and a preview of potential delays.

ACCESS EASEMENTS · SHARED WELLS · WILLIAMSON ACT · OLD LIENS · PERMIT CONDITIONS · ACREAGE

Items that make us slow down

Not every exception is a problem. These are the ones that get our full attention on Central Coast land:

1. An access easement that does not clearly connect the parcel to a public road. Landlocked parcels exist here, and "we have always driven through the neighbor's place" is not legal access.

2. A shared well agreement with no maintenance or cost-sharing terms.

3. A Williamson Act contract when the buyer plans to build a second home, split the parcel, or run a non-agricultural business.

4. An unreleased deed of trust from a lender that no longer exists, which can take real time to clear.

5. Recorded conditions from a prior permit that limit future development, common on coastal and hillside lots.

6. A legal description that does not match the acreage marketed or the fenced area on the ground.

Every exception on a prelim is a sentence in the property's story. Read the whole story before you write the next chapter.

EASEMENTS · AGREEMENTS · RESTRICTIONS

Getting the underlying documents

The prelim lists documents by recording number, and the title company will provide copies on request. Ask for every easement, agreement, and restriction. A one-line reference to a "road easement per document recorded in 1962" tells you nothing about width, location, or who maintains it. The document itself does.

For anything that affects how you plan to use the land, especially access, water, and building rights, we recommend having a real estate attorney review it. We will tell you plainly when a question has moved beyond what we can answer and needs counsel.

THE FIRST WEEK OF ESCROW

How this fits your timeline

The prelim usually arrives early in escrow. Read it in the first week, request documents right away, and raise questions inside your investigation period. Title issues can often be cured before close, but curing takes time and cooperation, and you want the leverage of an open contingency while it is being sorted out. Our post on buying land to build on in SLO County explains how title review fits into the larger due diligence picture for raw land.

Your next step on that parcel

If you have a prelim in hand, send it to us and we will walk through the exceptions with you and tell you which underlying documents to request first. If you are still looking, browse current land and acreage listings across SLO County and we will pull the title history on the ones that interest you before you make an offer.

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Talk With Kim & Kristen

We are Kim San Jule and Kristen Gentry, Broker Associates with Real Broker, serving San Luis Obispo County and the Central Coast. Whether you are buying, selling, or simply thinking ahead, we are glad to be a resource.

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Kim San Jule · Broker Associate, DRE 01948144 · 805-345-8303 · kimsanjule@gmail.com

Kristen Gentry · Broker Associate, DRE 01968754 · 805-441-4618 · kristengentryslo@gmail.com

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