One of the many aspects of a property that will be investigated during the due diligence period is whether or not there are any environmental liens associated with a property. If the property is home to a current or former business, it’s possible that waste from business production contaminated certain areas of the property. If a state or federal agency learns about the existence of environmental contamination from a business, they may assess an environmental lien on a property to pay for waste cleanup or land restoration.
Any prospective purchaser is recommended to have a title service company investigate a property and run an environmental survey to look for the existence of an environmental lien or ground pollution, because if these issues go unresolved after you’ve closed on a property, that liability now becomes your problem. Don’t get left stuck with an environmental lien because you moved forward with a purchase without investigating or resolving existing liabilities.
For buyers who want even more protection from certain liabilities associated with a property, we recommend purchasing an owner’s title insurance policy. You will need a lender’s title insurance policy if you are getting a loan for commercial property, but you can also purchase an owner’s title insurance property to protect yourself from issues that originated prior to your acquisition. But does title insurance protect you from having to pay off an environmental lien that was discovered to have originated with a previous owner?
Environmental Liens And Title Insurance
It’s worth noting that a standard title insurance policy generally does not include coverage for environmental liens or environmental contamination. Fortunately, a savvy title service team can help you get the protection you need if there is reason to believe it is wise to carry specific protection for environmental liens. Your title service agent can add ALTA endorsements to your title insurance policy. These act like supplemental coverage for specific issues related to your property.
So while your standard policy won’t offer you this protection, you can ensure your financial interests are protected by working with an experienced title service team that understands the ins and outs of ALTA endorsements and how to put them to use for you so there are no unwanted surprises down the road. For more information about ALTA endorsements or environmental liens associated with commercial property, reach out to the team at Commercial Partners today at (612) 337-2470.