Title defects aren’t limited to residential real estate. With most types of insurance, you’re protecting yourself from something that may happen in the future. With title insurance, you’re protecting yourself from something that happened in the past, but which you’re unaware of. If a defect in title surfaces after you take ownership of a property, it could be very costly for you.
Lender’s Policies and Owner’s Policies
Lenders are fully aware of the consequences of not having title insurance, which is why they require a lender’s policy as a condition of approving a loan. Lender’s title insurance protects the bank’s interests if a lien, an error or other title defect should arise. Owner’s title insurance, as the name suggests, protects the owner. A lender’s policy will not protect property owners’ interests.
If you borrow from multiple sources to purchase commercial real estate, each lender will require its own title insurance policy. Lender’s title insurance protects the lender, not the land itself.
Protecting Your Interest
As a real estate owner, you could find yourself responsible for a lien that was placed on the property before you owned it. You could lose a significant portion of your investment—or the property itself. The only way to protect yourself from unforeseen title errors or other defects is to have an owner’s policy.
Because the stakes are so high in commercial real estate, you can’t afford to overlook this step. Owner’s title insurance is optional, but make no mistake: it’s not a formality. It’s real protection you can’t afford to be without.
Do You Need Title Insurance?
It’s always best to work with knowledgeable, experienced title insurance agents who can ensure your transaction runs smoothly.
We’d love to help you with your commercial real estate transaction.
Call us at 615-393-6222 or contact us online today. We’ll evaluate your situation and explain how we can make things easier for everyone involved.