In Schedule A of your title commitment, there are a few different types of interest to be insured. Fee simple, leasehold, and easement interests are the most common ones you’ll encounter. Each of these interests can be insured through an owner’s or lender’s policy and will include a policy jacket that provides the covered title risks.
Fee Simple Interest
Fee simple is the standard interest insured on most transactions. It’s the descriptive term for absolute ownership of the land. If a property is deeded to you, a fee simple policy would most likely be used.
Lease Hold Interest
A policy insuring a leasehold interest looks relatively the same as a fee simple, but the big difference is the interest to be insured. It will have the same exceptions as any other fee simple insured standard policy, but your insured interest in the land is bound by the terms and conditions of the lease. This policy insures the tenant’s leasehold interest if there were to be a problem with the title to the property. In order to insure a leasehold policy, the lease or memorandum of lease must be recorded through the county.
Easement Interests
Easement interests are insured when you are purchasing an easement over a portion of someone else’s land. Your interest in the land will be defined within the easement document (which should also be recorded). A policy insuring this type of interest would protect you from matters that may take the easement away from you.
Remember, each transaction is different and all policies and insured interests are subject to the exclusions of your specific policy. If you have any questions, please contact any of our title officers, your real estate agent, or your real estate attorney.
