When you’re working to close on your first or latest commercial property, you want everything to run smoothly up until the day you close. Keeping your closing date on track rarely happens by chance, so it’s wise to understand some of the common issues that can delay closing so that you can avoid headaches down the road. In today’s blog, we explore some potential issues that could cause delays in your commercial closing, and we give some tips on avoiding these problems.
Common Issues That Delay Closing
As a title service company, we’re very familiar with the closing process and what issues can act as a roadblock on your way to closing your latest commercial deal. Here’s a look at some of the most common issues we work to prevent with our clients:
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Outstanding Liens - Outstanding liens will cloud a title and may delay closing until these liens are paid. By working with a title company, you can ensure that these liens are identified early in the process so that the seller can develop a plan to settle their liens prior to the sale or with funds received from the sale.
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Building Improvements - During a commercial acquisition, you will have a number of inspections and surveys conducted to learn a lot more about the quality of the property you are considering purchasing. Oftentimes issues will be found during these assessments that will need to be addressed before closing. A title company can be a wonderful mediator during the due diligence period to ensure both sides have assessments conducted or make improvements in a timely manner to keep closing on track.
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Encroachments/Easements - Easements, encroachments and other encumbrances will be discovered by your title search team, and addressing any of these existing issues well ahead of time can help keep closing on track. If an encroachment needs to be corrected before the sale or you want to buy your way out of a pre-existing easement agreement, being aware of these encumbrances early in the process can help you avoid unexpected surprises and take care of potential issues before closing arrives.
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Clerical Errors - A minor clerical error like a misdrawn boundary, a missing owner on a title or a misspelling on the title can all cause minor or major delays with the sale. Your title service team can research the title and the property and make sure that a minor clerical oversight doesn’t force you out of your original closing date.
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Loan Requirements - If you’re financing your commercial purchase, you need to make sure that your borrower will allow you to have the funds that you need at closing. Your lender will likely require you to fulfill certain obligations before they will provide financing, so you need to take care of these items ahead of closing. One such requirement is the acquisition of lender’s title insurance, which would protect your lender in the event of a title issue in the future. Our team can help you secure a one-time lender’s title insurance policy and clear other hurdles needed to secure financing by your closing date.
Don’t let a small issue delay closing or cause a sale to fall through. The best way to avoid all these potential headaches and move forward with your sale with confidence is by working with an experienced title service company like Commercial Partners. For more information on how we can keep your closing date on track, reach out to the team at Commercial Partners today at (612) 337-2470.