The California Land Title Association (CLTA) policy primarily insures against which type of encumbrance?

The California Land Title Association (CLTA) policy primarily provides insurance against recorded encumbrances. This type of title insurance is designed to protect property owners and lenders from losses related to claims against the title of the property that are documented in public records. This includes issues such as mortgages, liens, and deeds of trust, which are all formally recorded and therefore accessible for review.

Recorded encumbrances are those that have been filed with local government authorities and are generally known to all interested parties. This protection is vital because it helps to affirm the ownership rights of the insured party and ensures that no unforeseen claims affect their legal standing after the property purchase.

In contrast, unrecorded encumbrances—such as certain types of leases and oral agreements—are not covered under a CLTA policy because they can be harder to track and verify. Tax liens, although significant, are also a type of encumbrance that may not be fully covered by CLTA policies depending on their specifics, as certain government claims can have priority. Therefore, focusing on recorded encumbrances aligns with the purpose and coverage of the CLTA policy.