If you’ve finally decided that now is the time to find a plot of land and build your dream commercial venture, you’re probably both nervous and excited for what’s to come in the future. There are a number of different steps you’ll need to take in order to secure a property and break ground on your vision, and one of the things that will be discussed is commercial title insurance.
As we’ve talked about on the blog in the past, commercial title insurance protects you or your mortgage lender in the event that someone else claims to actually own the property in question. This may make sense for buildings or homes that have been sold numerous times in the past, but if you’re constructing a new building, nobody is going to have a rightful claim to your build, right? In today’s blog, we take a closer look at commercial title insurance on new builds.
Do I Need Commercial Title Insurance If I’m Building?
While you’re right to assume that nobody will be able to say that they are the rightful owners of a structure on your property that you constructed yourself, commercial title insurance isn’t just for buildings that are created on a specific plot of land. A commercial title insurance policy protects the land itself, and even though you are the one building on the land, it’s unlikely that you will be the first to own that land. There’s a good chance that the land on which you plan to build has been sold a handful of times in the past, and if the proper channels were not followed or something was missed during one of these sales, it’s possible that someone else may actually have a legitimate claim to the property that you believe you have legally purchased.
So even though you are building a new commercial venture on your property, you will likely still need to purchase a commercial title insurance policy. Oftentimes this policy is required by your mortgage lender. As the property owner, you will need to pay a one-time fee for this policy that protects the financial interests of your mortgage holder in the event that a legitimate claim is made on your property.
You can also purchase a commercial title insurance policy for yourself so that you are not out of luck if someone comes out of the woodwork and proves that they are actually the rightful owner of the land you are building on. Again, this is a one-time payment that will protect you for as long as you own the property, and the policy may continue to protect your spouse or your heirs if you pass away. This type of commercial title insurance is not required, regardless of whether you’ve purchased a massive commercial structure or you plan on building on a vacant lot, but oftentimes it is recommended simply because of the peace of mind and financial security the policy provides.
We want to help bring your next commercial vision to life, and we can help with many aspects of its creation, including the development and purchasing of a commercial title insurance policy. For more information about commercial title insurance policies, or for assistance with another aspect of a commercial purchase, reach out to the team at Commercial Partners today at (612) 337-2470.