It’s tempting to skim a title commitment because much of the document contains technical language. However, buyers should understand the exceptions associated with their property before closing.
Why?
Because title exceptions can reveal limitations or third-party rights that continue after ownership transfers.
Depending on the property, an exception could potentially affect:
For a buyer planning to simply live in an existing home, some exceptions may have very little practical effect.
For a buyer planning to build a detached garage, install a fence, add a structure, divide land, develop acreage, or modify waterfront property, the same exception could deserve much closer examination.
Context matters.
Every property has its own history, so there is no universal list of exceptions that applies to every transaction. However, several types appear frequently.
Utility easements give a utility provider certain rights to use or access a defined portion of the property.
They may exist for:
A utility easement doesn’t mean the utility company owns your property. It generally means the company has specified rights within the easement area.
For many homeowners, an established utility easement has little effect on everyday life. But buyers planning improvements should understand where the easement is located and whether it could affect future construction.
An access easement can give another person or property owner the right to travel across part of the land.
These arrangements may be especially relevant for rural properties, private roads, landlocked parcels, shared driveways, cabins, and lake properties.
Buyers should understand whether an access exception grants someone else rights across the property or provides the property itself with necessary access across neighboring land.
Access can have a significant effect on the practical use of real estate, making these exceptions worthy of careful review.
Properties within subdivisions or planned developments may be subject to recorded covenants, declarations, or restrictions.
These documents can establish rules affecting property use.
Depending on the recorded documents, restrictions might address matters such as:
A reference to recorded covenants shouldn’t simply be ignored because the language appears routine. Buyers should understand restrictions that could conflict with how they intend to use the property.
Minnesota buyers—particularly those purchasing rural land or acreage—may encounter exceptions related to mineral rights.
In some situations, rights to minerals beneath the land may have been previously reserved or transferred separately from ownership of the surface property.
A buyer purchasing the land therefore should not automatically assume that every subsurface right is included simply because the buyer owns the surface.
If mineral rights matter to the intended use or value of the property, this type of exception deserves closer attention.
Title commitments may include exceptions related to current or future property taxes.
A tax exception doesn’t necessarily mean the seller has failed to pay taxes. Some taxes may simply not yet be due or payable.
Property taxes are also addressed during the closing process through appropriate calculations and adjustments based on the transaction.
The important point is to distinguish ordinary tax language from an actual delinquent tax issue that must be resolved.
Some title insurance coverage may exclude matters that would be revealed by an accurate survey or inspection of the property.
These can potentially involve:
A fence, driveway, shed, garage, or other improvement may appear to establish a clear boundary when the legal property line is actually somewhere else.
Buyers purchasing acreage, waterfront property, unusual parcels, or property where future construction is planned may want to pay particular attention to survey-related exceptions.
Minnesota’s abundance of lakes makes waterfront property especially important when discussing title exceptions.
Lake and waterfront properties may involve:
An attractive shoreline does not necessarily tell you everything about the legal rights associated with it.
For buyers purchasing Minnesota lake property, understanding any recorded shoreline or access exceptions can be particularly important.
There isn’t one category that is automatically the “worst.” Instead, buyers should focus on exceptions that could materially interfere with their expected use of the property.
A useful question is:
Does this exception affect something I plan to do with this property?
Consider a few examples.
If you want to build a large detached garage, pay attention to easements and restrictions affecting the proposed building area.
If you’re buying lakefront property because private water access is important to you, examine shoreline and access rights carefully.
If you’re buying rural acreage with plans to develop or divide it later, access, easement, mineral, and boundary matters could become particularly important.
If a shared driveway provides the only practical route to the home, understand the recorded access rights.
An exception that barely matters to one buyer could be extremely important to another.
While title exceptions are normal, buyers should seek clarification when an exception is unclear or appears inconsistent with their understanding of the property.
Examples include:
The goal isn’t to assume the worst. It is to understand what the recorded document actually says before accepting the exception.
Sometimes, but not always.
Some exceptions represent permanent rights that run with the land and therefore remain in place after the property changes owners.
Others may be modified or removed if the underlying issue is resolved and the title insurer is satisfied with the documentation.
This is one reason buyers should review their title commitment early enough to ask questions. Waiting until the closing table provides much less time to investigate an unfamiliar item.
If an exception raises legal questions about property rights or how a recorded restriction applies to a buyer’s specific plans, consultation with a qualified Minnesota real estate attorney may also be appropriate.
Another common source of confusion is the difference between requirements and exceptions.
Requirements are items that generally must be completed before the title insurance policy can be issued as proposed.
Examples could include paying an existing mortgage, obtaining necessary documents, or properly executing and recording documents associated with the transfer.
Exceptions are different. They identify matters that will remain outside the policy’s coverage.
A simple way to remember the distinction is:
Requirements are things that need attention before the policy can be issued as proposed. Exceptions define limits on what the policy will insure.
Understanding that difference makes a title commitment considerably easier to read.
No.
A property can have marketable title and still have exceptions.
In fact, many properties have legitimate easements, restrictions, taxes, and other recorded matters associated with them.
The goal of title work isn’t necessarily to erase every historical document connected to a property. The goal is to determine ownership, identify relevant interests and encumbrances, address issues that need resolution, and clearly establish what the title insurance policy will and will not cover.
That’s why buyers shouldn’t judge a property simply by the number of exceptions listed.
Understanding the substance of each relevant exception is far more useful.
Title insurance is designed to protect owners and lenders from covered losses associated with certain title defects.
In Minnesota, an owner’s title insurance policy protects the buyer against covered title problems, while a lender’s policy protects the mortgage lender’s financial interest.
The distinction matters because a lender’s policy does not substitute for an owner’s policy.
Exceptions establish boundaries around that coverage. If a matter is specifically excepted from the policy, buyers generally should not assume they have title insurance protection against a loss arising from that matter.
This is why reading the commitment before closing is so valuable: buyers can see those coverage boundaries before the final policy is issued.
Before issuing a title commitment, title professionals examine records associated with the property.
Depending on the transaction and property, the title process can reveal deeds, mortgages, liens, easements, covenants, judgments, tax matters, and other recorded interests.
All Seasons Title describes title and judgment searches, title commitment preparation, owner’s and lender’s title insurance, deed preparation, and closing services among the title work it provides.
That research creates a clearer picture of the property’s ownership history and the matters affecting title.
The resulting commitment allows buyers, lenders, REALTORS®, attorneys, and other parties to identify what must be addressed before closing and what will remain as exceptions.
When your title commitment arrives, consider reviewing it with these questions in mind:
These questions turn a technical document into something more practical: a description of the property rights you’re actually purchasing.
A home’s kitchen, square footage, acreage, neighborhood, and view are easy to see. The legal rights attached to the land are not.
That’s what makes title exceptions important.
They help reveal the less-visible framework surrounding property ownership: who may have access, which restrictions remain attached to the land, what rights have been reserved, and where title insurance coverage has boundaries.
Most exceptions should not automatically create alarm. Many are ordinary parts of Minnesota property ownership. But every buyer benefits from understanding the exceptions that affect their particular property.
A careful title review gives buyers the opportunity to ask questions before signing final closing documents and to make sure the legal realities of the property align with their expectations.
For Minnesota homebuyers, that knowledge can be every bit as important as knowing the condition of the roof, the results of the inspection, or the final mortgage payment.
All Seasons Title provides professional title services for residential and commercial real estate transactions throughout Minnesota. Its services include title and judgment searches, title commitment preparation, owner’s and lender’s title insurance, deed and sale disclosure form preparation, and closing services.
All Seasons Title
100 Forest Avenue East
Mora, MN 55051
Phone: 320-209-7145
Email: orders@allseasonstitle.com
Hours: Monday-Friday, 8:00 a.m.-5:00 p.m.