The commercial property you just purchased has a history, and sometimes that history includes unwanted baggage. Before the closing process for the real estate transaction, we do a title search on the property to determine whether there are any title defects that could affect the purchase. One common issue that buyers face when doing a title search is an error in public records. Humans aren't perfect, and a clerical or filing error regarding your commercial property could affect the deed and result in unexpected costs.
A title search is done to make sure there are no problems with the title of your property. Sometimes there are mistakes in public records, like an incorrect description of the property or something that's missing. If the legal characteristics of the property are different than what's listed on the documents, commercial buyers could have problems with their neighbors or other legal requirements.
HOW TO AVOID ERRORS IN PUBLIC RECORDS
If the legal documents are not recorded correctly or if the bank or title agency does not handle the mortgage releases properly, it can cause problems for the buyers. These issues cannot be resolved until you take care of them.
It is hard to avoid all errors in public records. This is because people who buy commercial property cannot control a property's past or a mistake that might have been made by the people who file and record these documents. Also, not all errors can be found before closing. However, an Owner's Policy of title insurance will help protect your ownership rights from errors and defects in public records. This insurance typically covers the legal costs to defend your interests and certain losses if there is a problem with the title of the property.
CONCLUSION
While we cannot control everything that has happened in the past, we can take measures to protect ourselves from potential problems. An Owner's Policy of title insurance is one way to help safeguard your investment in commercial property. If you have any questions about how to avoid errors in public records or how title insurance can help, please contact our Skyway team.