Are you an investor focusing on commercial properties? Title insurance is a vital part of any real estate transaction, no matter how big or small. So understanding its value is so important.
Let’s take a closer look at the road to obtaining title insurance on your new commercial building.
The Importance of a Title Search for Commercial Property
Whether you are purchasing multi-family housing, a retail or restaurant space, or an office building - you want to have a title search done. This is an in-depth review of the property’s history so that you know your purchase doesn’t come with any encumbrances.
Many things can impact the title - these are just a few of the most common:
Outstanding taxes
Liens
Judgments
Encroachments
Fraudulent or forged documents
Outstanding mortgages
Bankruptcies
Easements
Finding these title issues before you take ownership can save a lot of time, money, and headaches later. There is a lot at stake in commercial real estate transactions so you want to make sure that the title is clear before moving on.
The Need For Title Insurance on Commercial Buildings
While title examiners take every step to ensure a thorough search, things can arise that can interfere with your rights to title. This could happen tomorrow - or years in the future. For instance, if a large judgment was attached to the property before you took ownership, but it was erroneously recorded and didn’t appear on the title search, you could now be responsible for paying off the judgment - even if it is against the previous owner. Or, a missing heir may come forward claiming rights to the property you own.
A couple of things that pertain mostly to commercial title insurance involve zoning issues and environmental protections - both arising more often than you’d imagine.
To protect yourself - and all that you have invested in the commercial property - you will have to fight off these claims. This can get costly and can turn into a long, drawn-out legal battle.
With title insurance, your interest in the property is protected. What’s more, the costs and time needed to fight these claims will be handled on your behalf.
This is what title insurance is all about - and a great example of why you need it.
How Long Does it Take to Get Title Insurance?
Before you can purchase a title insurance policy for your commercial building, you have to have a title search done. The amount of time it takes to do this will vary, but you can expect it within about two weeks.
Remember, this is a deep dive into the entire history of the property. It is a tedious process and it takes time.
Once it is complete, the results will be reflected in a title commitment which will also provide you with the option to purchase title insurance. If you do, the premium will be paid one time at closing and your right to title will be protected for as long as you have an interest in the property.
Should an issue ever arise, your title insurance is ready to go. It’s that easy.
Commercial Title Services at Endeavor Title
It is imperative that you have a title search and purchase title insurance when you invest in commercial real estate. There is too much at stake not to. And Endeavor Title is here to walk you through it.
To learn more or to get started, contact us today at (410) 666-378.