Title clearing and escrow go hand in hand. Clouds on the title (i.e., invalid claims left on a title from a previous transaction) can stall your commercial real estate deal worse than rush hour on the Strip.
For example, I commonly see cases where the previous owner of a property has passed away, but their name hasn’t been removed from the title, creating a roadblock for a sale. Clouds on title can also lead to problems from the buyer’s perspective, such as in cases where the seller’s old loans need to be removed from the title.
Often in commercial real estate transactions, an old lease from a previous tenant can remain on the title even after they’ve moved or gone out of business. Many owners don’t realize they need to record these changes, or they simply forget to do so in a timely manner.
Knowing the previous intended uses of a property is also important. Despite a buyer’s intended use, they could still unknowingly be subject to the restrictions of the previous use case, which can result in unexpected and hefty financial losses. These are just a few examples of why it’s essential to get this outdated information cleared from a title before you proceed with a deal.
Simplify the title clearing process with insight from an escrow officer
The title clearing process can take years to resolve, and some cases require legal work and obtaining public notice. Fortunately, in more common instances, title clearance is relatively quick and painless—especially if you do your homework upfront.
Maintaining thorough records of your property titles, previous tenants, intended uses, and other relevant information over the years is crucial to keeping title-related problems at bay.
If you do run into title clearing and escrow issues, working with an experienced national escrow officer can help alleviate some of the pain. I can access public records for you and provide a report on exactly what’s stopping your deal from moving forward, ensuring that you walk away with your best title clearance options.
Have questions about your commercial real estate transaction? Shoot me an email at firstname.lastname@example.org.