Preliminary Title Report (PTR): Meaning, Limitations, and Example

A Preliminary Title Report (PTR) is a legal document issued by a title company early in a real estate transaction. It outlines the current legal status of a property’s title and discloses any issues that could affect ownership such as liens, easements, encumbrances, or pending lawsuits. The PTR serves as a snapshot of the title’s condition before a title insurance policy is issued.

Buyers, sellers, and lenders rely on the PTR to ensure that the property has a clear and marketable title before finalizing a transaction. If there are any title defects or restrictions, the PTR highlights them so they can be resolved prior to closing.

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What’s Included in a PTR?

A standard Preliminary Title Report includes:

• Legal description of the property

• Current owner of record

• Deeds of trust or mortgages tied to the property

• Easements (such as utility or access rights)

• Judgments, liens, or tax delinquencies

• Restrictions or covenants that may affect future use

  
  

Unlike title insurance, the PTR does not offer coverage it simply discloses information. It’s up to the buyer and their agent or attorney to review the report carefully and address any red flags.

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Limitations of a Preliminary Title Report

The PTR is not a guarantee of title, and it doesn’t cover future or undiscovered claims. It only reflects the public record as of the date it’s issued and may be subject to change before closing. Additionally, off-record issues—such as unrecorded easements, boundary disputes, or forged documents—won’t appear in a PTR.

Buyers must understand that title insurance protection only begins after the policy is officially issued at closing, not at the PTR stage. The PTR is a tool for identifying and resolving title problems—not a form of protection in itself.

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Real-World Example

Imagine a buyer is under contract to purchase a commercial property. The title company issues a Preliminary Title Report that reveals an old mechanics lien filed by a roofing contractor who was never paid. The lien is still active, and if left unresolved, it could lead to legal issues down the line. Thanks to the PTR, the buyer and seller identify the problem early. The seller clears the lien before closing, allowing the buyer to obtain clean title and title insurance coverage.

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Final Thoughts

A Preliminary Title Report (PTR) is a vital part of due diligence in any real estate transaction. It helps uncover title issues that could delay or derail closing and ensures that everyone is aware of any legal claims against the property. While it doesn’t offer protection, the PTR gives buyers the opportunity to take action before finalizing the deal. Always read it carefully, ask questions, and work with professionals to clear any potential problems before you sign on the dotted line.