Search Site
Menu
The Importance of Commercial Title Review

The process of a title search is a fascinating puzzle. It is so interesting to see the history of ownership and the different burdens and benefits related to a property. Even more so is the value a title search can bring to a client, especially in relation to a parcel of commercial land.

The thorough examination of title should be a part of due diligence for any deal to gather vital property information. Generally, a title commitment will provide the current owner of record, a legal description of the property, any easements, restrictions or covenants which would apply to the property and exceptions to the title policy. It also will show any liens, mortgages or tax issues. In other words, the title search gives you a better understanding of the history of the property, the chain of title and what issues could impact the transaction.

One of the major misconceptions buyers have about title policies is that as long as the purchase of land is insured nothing further is needed. Unfortunately, this is not the case. Title insurance is a policy purchased to protect the buyer from defects in the chain of title. The title company is promising that the seller has the right to sell the property to the buyer and there are no major debts prohibiting that sale. If the title company makes an error, the policy covers the legal fees over the dispute and/or reimbursement of the policy amount in the event the title company cannot prevail.

What title insurance does not automatically cover is any encumbrance that is an exception to the policy. This can be anything from a gas pipeline easement running through the middle of the tract to a restriction against building height or a particular use. Title attorneys assist in this area by carefully reviewing every detail of the policy and making objections to potential issues or errors on the title commitment. Title attorneys use these objections to basically “clean up” the policy. They also evaluate the property to determine any need for endorsements, which are additional coverages addressing issues such as surface use waivers, boundary discrepancies, zoning and environmental issues.

Large title issues can impact the value of the property, the timeline for project construction and even the ability of the developer to construct what they planned for in the development. While title insurance in a residential purchase is often seen as a formality, title insurance in commercial transactions is an integral part of due diligence and closing. Since commercial deals are frequently a high-stakes proposition, buyers and their lenders have a strong interest in ensuring the title policy issued is the best policy available. Title attorneys are key in obtaining that level of a policy.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

Contact a Dedicated Texas Business Lawyer To Schedule a Consultation
Call 281-367-1222 or contact us online to schedule a meeting.

Strong In Action

  • Spring 2019

    The Strong Firm represents borrower in $42.3 million HUD construction loan for multifamily real estate development in Walton County, Florida.

    Read More
  • Spring 2019

    The Strong Firm acts as legal counsel for borrower in $32.1 million HUD construction loan for multifamily real estate development in Conroe, Texas.

    Read More
  • Spring 2019

    The Strong Firm aids borrower in $31.7 million HUD construction loan for multifamily real estate development in Nueces County, Texas.

    Read More
  • Spring 2019

    The Strong Firm represents borrower in the refinancing of a $3.57 million commercial mortgage-backed security for a commercial office facility in Montgomery County, Texas.

    Read More
  1. 1
  2. 2
  3. 3
  4. 4
  5. 5
  • Peer Rated 2019 Award

Recent Blog Posts

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and the Bankruptcy Provisions Therein

Last Friday, Congress passed and President Trump executed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” of “Stimulus Bill”) granting a significant and admirable level of support to the U.S. economy that has been left reeling by the one-two punch of the COVID-19 pandemic and OPEC’s… posturing.  While
Read More
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and the Bankruptcy Provisions Therein

Combating Consumer Scams Amid COVID-19

As Texans, we have weathered our share of crises and disaster, although, here in southeast Texas, it’s usually in the form of a hurricane. Times of crisis and uncertainty, such as the current COVID-19 outbreak, tend to bring out not only the very best in people, but also the very
Read More
Combating Consumer Scams Amid COVID-19

Considerations for Commercial Property Owners and COVID-19

The novel coronavirus (COVID-19) has wreaked havoc on the world and our nation, casting widespread uncertainty and hardship in seemingly every corner of the economy. With many commercial tenants in dire financial straits – particularly those who rely upon customer interaction (i.e. retail, restaurant, and entertainment) – commercial landlords are
Read More
Considerations for Commercial Property Owners and COVID-19

Small Business Owner’s Guide to the CARES Act

The U.S. Senate Committee on Small Business & Entrepreneurship has put together the below summary of programs and assistance available to small business owners and certain nonprofit organizations through the Small Business Administration (“SBA”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).  The following information is current
Read More
Small Business Owner’s Guide to the CARES Act
  • Video Vault


    Watch videos done by our legal team to gain a better understanding of your legal needs. Our lawyers give video insight into areas such as Real Estate, Business Law, Mergers & Acquisitions and much more.

Pay Retainer Online

Use our easy-to-use and secure online payment feature.
We accept all major credit cards.

Pay Your Retainer

Contact us

Quick Contact Form