When performing commercial real estate transactions, the unfortunate reality is that sometimes things don’t go perfectly. Title defects can be a common occurrence in commercial real estate, and when they arise it can lead to claims and extended legal battles. That is, if you don’t have a solid title insurance company behind you!
Here are three of the more common title defects that are found when writing commercial title insurance policies:
- Public Records Errors
Filling and/or clerical errors are common in any field, but are especially common in commercial real estate transactions. These types of errors or omissions can have a large impact on your property deed or survey. The best way to avoid this type of defect is by having a title search performed by an experienced title insurance company, who can identity and rectify these mistakes before you purchase your property.
- Unknown Liens on the Property
If a previous owner of the property has failed to pay or record any debts, the lender may place a lien on the property in an attempt to recover the debt. This would become your responsibility, even if the debt is not yours. It is vital to work with your title company to clear this up before closing on the property.
- Forgeries and False Impersonations
The final defect we will discuss that can jeopardize your title are forgeries and false impersonations. Simply put, there may be forged or falsified documents that can impact your right to property ownership. Furthermore, it is possible that someone may falsely impersonate a previous owner of the property, which will similarly affect your property ownership.
Commercial real estate transactions can often be complex. It is incredibly important to work with a title company you can trust and depend on to deliver the services you need in a timely manner. Perhaps the greatest benefit of your title insurance policy (and working with a great title company) is that any legal fees, should any defects in title arise, will be covered under your policy.