It is incredibly important that you do your research ahead of any commercial real estate transaction. Not only can this ensure that you are making a quality investment, but doing some research ahead of time can also help you catch any potential issues before they cause major problems down the road. One step you should always take prior to a commercial property purchase is a title search.
As the name implies, a title search helps prospective buyers learn more about the property’s ownership history, which can prove essential during the course of the sale. If you forgo a title search, you may encounter a number of issues as the transaction progresses. We are going to spotlight five of those potential issues in today’s blog.
Hidden Issues You May Run Into Without A Title Search
Trust the team at Commercial Partners to conduct a title search for any properties you are considering so that you don’t run into any surprises during the course of the acquisition. Here’s just a little peak at what types of issues you could run into if you forgo a title search.
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Liens - For starters, a title search will reveal liens recorded against the property. Finance liens and judgment liens against the property are pretty typical, but they aren’t always easy to resolve. Older liens may take some legwork with the city, county or a defunct financial institution to resolve, and we pride ourselves on uncovering these liens and helping our clients resolve them.
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Easements - A title search will also uncover existing easements. Easements are agreements that specify how, when and where someone else can legally enter the area. For example, if the property shares a driveway with another commercial entity, the easement will spell out how the property can be accessed by one party. It’s essential to be aware of any easement agreements ahead of closure.
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Chain Of Title Issues - You want to know exactly who you are buying the property from, and a title search will provide you with a clear understanding of the chain of title. This helps to ensure everything lines up with your purchase contract.
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Tax Info - A title search will also reveal the currently assessed property taxes so that you can understand what type of tax bill you can expect. This may increase or decrease once the property is reassessed after the purchase, but it’s always helpful to have a ballpark figure in mind ahead of the acquisition.
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Legal Boundaries - Finally, a title report will provide a full legal property description, including the address and the property boundaries. This can help you understand exactly where your property ends or uncover potential boundary disputes well before you move forward with a purchase.
You can try to do some research on a property’s title on your own, but odds are you do not have the experience, the connections or the familiarity with the process to ensure all potential issues are uncovered to guarantee a clean title. That’s where the team at Commercial Partners comes in. We specialize in helping clients research and clear a title so that they can move forward with a purchase knowing that everything is in order. We’d be happy to help you with any aspect of your commercial title, whether that involves a title search, title insurance or more. For all your commercial real estate needs, connect with the team at Commercial Partners today at (612) 337-2470.