Understanding Schedule B Exceptions in Title Insurance

Every title insurance commitment has a Schedule B. Most people skim past it to get to the price. That’s a mistake.

Schedule B lists the exceptions. These are things your policy will not cover, unless someone clears them first. In Arkansas, certain exceptions show up again and again. They come from state law, not just standard national forms. This guide covers the ones developers see most. It also explains why they exist and what it takes to clear them. If you want the fuller picture of how a commitment is put together, our guide on how to read a title insurance commitment is a good starting point.

Why an Arkansas Title Commitment’s Schedule B Won’t Look Like One from Another State

Title insurance forms look the same on the surface. But underneath, the exceptions depend on how each state records land, taxes property, and licenses the people who write policies.

Arkansas has an extra layer. Every title commitment must be signed by a title agent who lives in Arkansas and holds a state license. This is not just paperwork. The Arkansas Insurance Department requires that agent to hold a license, finish yearly training, and print their license number right on the document.

Because of this, local agents build habits. They learn what to expect based on years of work in a specific county, or with a certain type of land. A commitment from Little Rock and one from Delta farmland an hour away can look different, even under the same rules. If you build across several counties, don’t expect the same Schedule B wording every time.

Severed Mineral Rights: An Exception Arkansas Buyers Run Into More Than They Expect

Arkansas has a long history of oil, gas, and mineral work. That history shows up in land titles today.

Arkansas law allows mineral rights to split from the surface. Once split, the minerals become their own separate estate. They get owned and taxed apart from the land above them. An old deed might have kept “all oil, gas, and other minerals” for the seller. That old line can still control the property today, even if no one alive remembers it.

This is why so many Arkansas commitments carry a mineral rights exception. The title company is not being extra careful for no reason. If the minerals were split off at some point, the current landowner may not own what sits under their own land. A buyer who expects to get the surface and the minerals together can be in for a surprise.

Here is what that means in real terms:

• The mineral owner can use the surface to reach and remove the minerals, within reason.
• The surface owner can still build on the land, but a mineral lease or an active drilling site can affect what happens there.
• Buying out the mineral rights is possible. But only if you can find the current owner and they agree to sell.

If your project involves any real digging or construction, ask your title company for the full history of mineral reservations. Don’t just look at the current exception wording.

Levee, Drainage, and Improvement District Assessments on Rural Arkansas Land

If your project sits in the Arkansas Delta, or on other low, flat farmland, expect to see a district assessment exception.

Arkansas has used levee and drainage districts since the early 1900s. These districts fight flooding along the Mississippi River and its smaller rivers. State law formed these districts. Landowners inside them pay assessments to fund the levees and drainage canals that protect their land. The Encyclopedia of Arkansas explains that these assessments act like a lien on the property. A court order creates that lien, not a normal tax bill.

That’s the key point to remember. A district assessment is not part of the regular county tax bill. So it may not show up the way normal property taxes do. It acts more like a lien attached to the land itself. It stays with the land even after a sale. Title companies list this as an exception because the assessment does not go away at closing. It’s an ongoing cost tied to the land as long as it sits inside the district.

For rural or farm land, ask early if the property sits inside a levee, drainage, or improvement district. Get a current statement of any unpaid assessments before you trust the title commitment alone.

UCC Financing Statements and Judgment Liens: The Exception Category Buyers Skim Past

This part of Schedule B reads like filler text. It usually is not.

UCC financing statements get filed with the Arkansas Secretary of State. They cover claims on personal property, things like equipment, inventory, or unpaid invoices. Normally, that has nothing to do with real estate. But a UCC filing can also work as a “fixture filing.” This ties a claim to items that become part of the building or land, like installed equipment. When that happens, a personal property filing starts to matter to your real estate deal.

Judgment liens work in a different way, but end up in this same part of Schedule B. A court judgment against the seller can attach to their real property. It can sit there until it’s paid off or it expires.

People tend to skim this section because it often looks like a bare list of document numbers. But a stray equipment filing tied to a building, or an old unpaid judgment from a past owner, can create real risk if no one checks it before closing.

How Curative Work Actually Clears an Exception Off an Arkansas Commitment

Clearing an exception takes more than a phone call. It usually means recording a new document.

In Arkansas, the most common fix is a quitclaim deed. It doesn’t fix a problem on its own. It works because the right person signs it. Say an heir got left off a deed. Or a name got misspelled in the legal description. Or an old spouse never gave up their claim. A quitclaim deed, signed by that exact person, can close the gap. The deed hands over whatever interest that person has. It comes with no guarantees, but that’s all that’s needed to fix the break in the chain of title.

Once signed and notarized, the new document must be recorded with the circuit clerk in the county where the land sits. Under Arkansas law, recording is what gives the fix real, public power against future claims. Until it’s recorded, the fix only counts between the people who signed it.

After it’s recorded, the title agent checks the new document. They confirm it actually closes the gap. Then they issue an updated commitment that drops the old exception. This last step matters. A signed and recorded quitclaim deed does not update your commitment on its own. Someone still has to bring it to the title company and ask for the exception to be removed.