If you purchased or plan to purchase commercial real estate, have likely investigated all the requirements. In addition to the obligations in the purchasing process, you may also consider some optional steps, such as purchasing a title insurance policy.
Understanding title insurance and when you need it may help protect you and your property.
Protection for property owners and lenders
According to the Texas Department of Insurance, title insurance safeguards property owners and lenders against financial losses resulting from title defects. Unlike other insurance coverages, title insurance is a one-time purchase. The policy protects you for as long as you or our heirs own the property. Such coverage may also apply to certain title warranties if you ever choose to sell the property and retain your policy.
Common title defects
Title defects include those factors that may render your property deed defective or invalid. For example, this may include the following:
- Documents not properly signed, witnessed, notarized, delivered, or executed
- Documents executed under expired, falsified or otherwise invalid powers of attorney
- Invalid documents due to incapacity, incompetency, undue influence, duress, forgery or fraud
- Lacking right of access to and from the property
- Unrecorded or undisclosed easements
Some issues involving liens also cause title defects.
Requirement for financing
While the state does not require you to have a title insurance policy for your commercial property, your loan lender might. As conditions of their financing, most lenders require property purchasers to obtain title coverage.
Obtaining the necessary coverages, such as title insurance, may help you protect your investment against unanticipated issues.
If you have questions about title insurance or other real estate law questions the attorneys at Quadros, Migl & Crosby are available to help. Please call us at (713) 900-1662 to speak with one of our Houston real estate attorneys today.