Why Do I Need Title Insurance for My Commercial Property?
There are many important aspects of buying commercial real estate property, and so there are key components of the commercial real estate process that are crucial to get the best deal on your property. One key piece of any commercial real estate transaction is title insurance. Title insurance has been a beneficial real estate option for many years, but not all business owners actually take advantage of it.
What is Title Insurance?
Having a title is having the right to owning a piece of real estate. Title insurance is insurance that protects a real estate buyer from any issues with the chain of title to a property. This type of insurance can be helpful in both residential and commercial real estate transactions. Keeping track of titles associated with real estate finances can get very complicated, so title insurance plays a crucial role in the buying and selling of property.
How is Title Insurance Used in Commercial Real Estate?
Title insurance is a huge part of the due diligence phase and closing process in commercial real estate deals and transactions. There is more at stake for these types of deals because there are more parties involved in the transactions, such as the buyer, the seller, and the lender(s). If there is a loan lender involved, the buyer will almost always pay for the loan title insurance policy. Buyers are almost always solely responsible for the title insurance costs because the seller will usually just add the cost into the purchasing price. Sometimes, however, there will be issues in trying to determine who benefits the most from the insurance policy, which is why many buyers want their own separate owner’s policy.
Without title insurance, it would be almost impossible to get lenders to risk big amounts of capital on complicated deals and difficult transactions, and buyers would also be more reluctant to buy property. Contact our skilled real estate attorneys at Fiore and Barber, LLC to learn more about commercial real estate titles.
