At its very core, the best time to purchase any type of insurance policy is before you need to rely on that policy for coverage. It would be wonderful if you had a crystal ball that could tell you that you won’t have major health issues in the coming year or that you’ll want to secure additional flood damage coverage as part of your homeowner’s insurance because a major storm will hit in the future, but we don’t have this luxury, so it can be difficult to know what type of coverage you need and when to secure it.
The same can be said for an owner’s title insurance policy for your commercial property purchase. It would be lovely if you knew for certain that you’d never need to cash in on this policy, but failing to have the policy when needed can cripple decades of hard-earned savings, so it’s not something you’ll want to be without for long. So when is the best time to secure a commercial title insurance policy? We explore the answer to that question in today’s blog.
When To Purchase Title Insurance
Before you make a commercial purchase, you are likely going to be required to have a title search performed in the event that you will be securing a loan from a financial institution to fund the purchase. This is necessary because your lender is going to require that you purchase a lender’s title insurance policy. This policy protects the lender from any unexpected title claims on a property, and the only way this policy is created is after a title services team has investigated a property's title to discover and clear any existing issues. So if you’re getting a loan, there will be a thorough investigation into the property’s title.
However, do not assume that this title investigation means that you can move forward with your purchase without a title insurance policy to protect your interests. The lender’s title insurance policy protects your bank, and a separate, one-time payment can be made to secure an owner’s title insurance policy that provides you with the same benefits. It’s impossible to know with complete certainty that every single potential issue was caught with a property that likely dates back hundreds of years, but you can secure this peace of mind with the help of an owner’s title insurance policy.
But when exactly should you purchase this policy? Simply put, the sooner, the better. The most common time for title issues to be discovered is during the process of a sale when records are being updated and the deed is changing hands. Some companies will take days or weeks to help you secure this policy, even though they were the ones investigating the title and should be able to streamline the process. This gap time - from when the deed is recorded to the moment the title insurance policy is secured - can be a time when title issues come to light, and that’s when you need coverage the most. Don’t go any longer than needed without a title insurance policy in place.
At Commercial Partners, we work with our clients from start to finish for all their title-related needs. We’ll investigate a title and ensure any outstanding defects are resolved prior to closing, and then because we have all the information at our disposal and can create title insurance policies for clients, we can oftentimes get our buyers a title insurance policy within hours of closing. Having that peace of mind on the same day that you close on your next adventure is one less potential mess to unravel, and we pride ourselves on being able to greatly reduce the time that buyers are exposed to title defect risk.
Let the team at Commercial Partners research your prospective commercial purchase and develop a personalized owner’s title insurance policy suited to your specific needs and business vision. You shouldn’t have to wait to protect yourself from risk, and we’ll do everything we can to bring you that peace of mind on the same day as closing. For more information, or for help with a different aspect of the commercial purchasing process, reach out to the team at Commercial Partners today at (612) 337-2470.