How to read a Michigan title commitment for an IRA property

A title commitment is easy to mistake for a clean-title certificate. It is not. It is an offer to issue a title insurance policy if the listed requirements are satisfied, subject to the listed exceptions and the policy's terms. For a Michigan property being purchased by a self-directed IRA, those pages need to answer two different questions: what affects the real estate, and can the account close in the ownership form its custodian requires?

The commitment usually arrives while several other deadlines are moving. That is a bad reason to skim it. An old mortgage, a shared driveway, a utility easement, a missing release, or a mismatch in the proposed buyer's name can take time to resolve. The buyer's title professional and Michigan attorney should review the actual commitment and underlying documents. A checklist helps the buyer bring them useful questions instead of assuming that no news means no issue.

Match the proposed insured and the property first

Start with the names and the land. The proposed insured should reflect the retirement account's purchasing and vesting language exactly as the self-directed IRA custodian instructs. The IRA owner should not substitute a personal name, sign in an individual capacity, or improvise an ownership format because it looks simpler. Ask the custodian to review the proposed buyer language before the offer or amendment deadline that controls it.

Then compare the commitment's legal description with the purchase agreement, prior deed, survey, tax record, and the property the parties believe is being sold. A street address is useful for finding a building; it is not the legal description of the estate being conveyed. Pay attention to parcel numbers, lots, metes-and-bounds calls, condominium units, parking rights, access parcels, and any separate legal descriptions tied to the transaction.

• Confirm the proposed insured name with the custodian in writing
• Match the seller's name with the current owner shown in the title work
• Compare every parcel number and legal description across the contract, commitment, deed, survey, and tax records
• Check whether access, parking, storage, waterfront, or other rights depend on a separate parcel or recorded document
• Ask the attorney or surveyor to explain any boundary description that does not match the buyer's understanding of the site

Separate requirements from exceptions

A commitment generally separates items that must happen before the policy can be issued from matters the policy will not cover. The labels and layout vary, so read the definitions supplied with the commitment. A requirement might call for a deed, payoff, release, tax payment, entity document, probate document, or another item needed for closing. An exception may leave an easement, restriction, lease, mineral interest, assessment, or survey matter outside coverage.

Do not treat a familiar-looking exception as harmless. Open the recorded document. A short entry in the commitment may point to several pages that define where utilities may run, who maintains a private road, which uses are restricted, or what rights another party holds. Whether an exception is common matters less than whether the underlying right conflicts with the proposed rental, development, agricultural, commercial, or long-term holding plan.

Trace liens and payoff items to a recorded release

Mortgages, construction liens, judgments, tax matters, and other encumbrances deserve a status beside each item: remains, will be paid, will be released, is disputed, or needs more research. A seller's statement that an old loan was paid does not remove a recorded mortgage from the chain of title. The title and closing professionals should identify what documentation is needed and confirm how the final policy will treat the item.

Michigan's recording system is part of the reason this work matters. Michigan Compiled Laws section 565.29 addresses the effect of an unrecorded conveyance against a later good-faith purchaser whose conveyance is first duly recorded. Section 565.201 lists requirements an instrument must meet to be accepted for recording. Those statutes do not decide the answer to a particular title problem, but they make clear that document form, delivery, and recording are not closing-table housekeeping.

Keep the recording sequence on the closing checklist. Ask who will record the deed and any related instruments, in what order, and how the buyer will receive confirmation. Also ask when the final owner's policy will be issued and how unresolved requirements will be tracked after closing. The commitment is temporary; the final policy and recorded documents are the permanent file.

Read easements against the actual site plan

An easement can be routine and still affect the plan. A utility corridor may limit where a building, sign, septic field, driveway, or stormwater feature can go. A private-road agreement may divide maintenance costs in a way the operating budget did not include. Access language may serve one use but not a heavier commercial or development use. Waterfront access may belong to a separate interest that is not included in the sale.

West Michigan properties often cross several layers of records: county deeds, township or city tax and zoning files, drain records, condominium documents, road agreements, plats, and private restrictions. The Register of Deeds records land documents; it does not decide whether a future use complies with zoning or whether a site plan is buildable. Review title, survey, land-use rules, and physical conditions together rather than expecting one source to answer all four.

Kent County's Register of Deeds says its office records documents concerning real property, including deeds, mortgages, land contracts, and liens. It also explains that recording publicly declares a document's existence so the records can be researched for property, ownership, and liens. Buyers in Ottawa, Muskegon, Allegan, Barry, and other counties should use the register for the county where the property is located and have a title professional or attorney interpret what the records mean for the deal.

Know what the survey can add

The title search follows recorded documents. A survey can reveal conditions on the ground that the record alone may not settle: fences over a line, a building inside an easement, a driveway crossing another parcel, an apparent encroachment, or improvements that do not fit the legal description. The right survey scope depends on the property and proposed use. Commercial, development, waterfront, rural, and irregular parcels may call for different work than a straightforward platted lot.

Ask the title company and attorney which exceptions might change if an acceptable survey is supplied and whether the insurer needs a specific form or certification. Ask the surveyor to plot recorded easements and exceptions that can be located. A survey does not insure title or approve land use, but it gives the title and legal review a picture of where recorded rights may meet actual improvements.

Keep IRA procedure inside the title timeline

Title work does not replace retirement-account review. The IRS says there is no list of approved investments for retirement plans. Its prohibited-transaction guidance describes improper use of an IRA by the owner, beneficiary, or another disqualified person and lists buying property for present or future personal use with IRA funds as a possible prohibited transaction. A title insurer's willingness to issue a policy is not IRS approval of the property or transaction.

Send the commitment, proposed deed, closing statement, financing documents, and any entity papers to the custodian with enough lead time for its process. Confirm who may sign, how earnest money and closing funds are sent, where refunds or credits must go, and which account should be billed for title and recording charges. Personal payment or a last-minute personal signature is not a safe workaround when the account owns the deal.

This article is educational, not legal, tax, financial, title-insurance, retirement-plan, or investment advice. No property, title policy, ownership structure, or strategy is approved or endorsed by the IRS. Have your own self-directed IRA custodian, CPA, Michigan attorney, title professional, surveyor, lender, and other qualified advisors review the account, commitment, documents, property, and proposed use before taking action.

Build the final title file before closing

Keep the current commitment and every revision, copies of the documents behind each exception, the survey, payoff and release evidence, tax information, the approved vesting language, the proposed deed, the closing statement, recording confirmations, and the final owner's policy. Maintain a short issue list showing who owns each question and when the answer is due. If an exception could affect access, use, cost, or control of the property, it should be resolved or knowingly accepted before the related contingency expires.

Primary sources for this review include Michigan Compiled Laws sections 565.29 and 565.201, the Kent County Register of Deeds guidance on recorded real-property documents, and the IRS pages on retirement-plan investments and prohibited transactions. They explain the public frameworks. The conclusions for a particular parcel, commitment, policy, and IRA belong to the buyer's own professionals.

Rennie can help identify West Michigan property and coordinate title, survey, inspection, and offer deadlines with the real estate side of the transaction. Legal conclusions, title coverage, and retirement-account decisions stay with the buyer's own attorney, title professional, custodian, CPA, and other advisors.