The Role of Commercial Title Search in Commercial Real Estate Sales

Commercial title search is a key component in any commercial real estate transaction. Without title searches, the buyers and sellers of properties would likely find the risks of selling and buying too high to proceed. By developing a strong understanding of commercial title search and the role it plays in commercial real estate, businesses can better protect their interests and assets when entering a commercial real estate transaction.

What is commercial title search? 

Commercial title search is the first step taken by insurance companies before issuing commercial title insurance. Title refers to the right of ownership of a parcel of real estate. The purpose of the title search is to reveal the background history of the property such as mortgages, deeds and easements. The title search can also reveal potential problems that may accompany the property. For example, the search may show that a contractor who worked on the property filed a lien because they were not compensated in full for completed work. The title search seeks to disclose all recorded histories of the property so that all parties have full knowledge of the real estate at the center of the transaction. 

Another reason commercial title searches are essential is that commercial real estate transactions are more intricate than residential real estate deals.  Firstly, typically involving a significant sum of money. Secondly, purchasing commercial real estate is a long term investment, which means buyers will want to be certain the property is in a condition that sets them up for a sustainable and secure future. In addition to title history, the title search will also outline encroachments, restrictions, and other property details that the buyer can make sure align with their expectations. If the commercial title search reveals a clouded title, the buyer has the right to negotiate with the seller or seek out a more suitable property. 

It is important to conduct a professional title search, preferably via the services of an experienced Florida real estate lawyer with a background in commercial title search and commercial title insurance.  Bringing this expertise onto the transactional working group ensures the best chances that problems or “clouds” are discovered.  Once clouds are discovered, a lawyer with experience in commercial title insurance would be able to work with you to clear the title of clouds so that the transaction can proceed. 

The benefits of commercial title insurance 

In addition to commercial title searches, there are many additional benefits to purchasing commercial title insurance. Title insurance will help safeguard your investment from potential issues and claims. For instance, if a claim is filed against a property, the owner may be responsible for all legal fees required to defend their ownership rights. With title insurance however, the owner can rely on the title insurance provider to address any potential title issues. 

Commercial title insurance also provides protection against unrecorded liens such as unpaid taxes, title fraud, incorrect or inadequate legal descriptions and errors in public records. In brief, commercial title insurance is a must for any buyer looking to purchase commercial real estate.

Commercial title search and title insurance will reduce your exposure to threats affecting your ownership and the true value of your property.

Call South Florida Law 

Are you a business looking to purchase commercial real estate? Make sure you know the history of the property in question to ensure a smooth and fair transaction. Take proactive measures and conduct a commercial title search through South Florida Law. Nima Ajabshir, Managing Partner of South Florida Law, is a registered Title Agent as well as a Real Estate Attorney.  This gives you the best of both worlds when it comes to title search, clearing titles and successfully completing your commercial real estate transaction. Reach out to South Florida Law at (945) 900-8885 or via our contact form

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