The Role of Title Insurance in Commercial Real Estate Transactions

Title Insurancein Commercial Real Estate

Commercial real estate transactions usually cost more than average home loans. There is so much risk for buyers. That is one of the reasons title insurance in commercial real estate transactions is so important.

This post will cover the basics of commercial title insurance.

Title Insurance in Commercial Real Estate Transactions

Title insurance is a form of insurance that covers an array of issues with a property’s title. If these issues arise, the policy can cover legal defense and the cost of paying claims. It is available for both commercial and residential real estate transactions.

Let’s take a closer look at title insurance for commercial real estate.

The Risks

A property title might not always be what it seems. A title could have inaccurate information. There could be liens or tax debts against the property. In some cases, there might be unknown owners at the time of the transaction. There is also the potential for outright fraud. Any one of these issues could lead to a claim against the title. With title insurance, you have protection against these types of claims.

Title Search

An insurer will perform a title search before issuing a policy. The lender will likely require a title search if you need a loan to buy the property. Even if you don’t need a loan, it is a good idea to have a title search.

A thorough title search can go a long way to protecting against those risks. The title company will trace the chain of title through every transaction. They will also search public records to find liens and debts that may exist.

Types of Policies

Beyond residential and commercial title insurance, there are policies for owners and lenders. A lender’s policy protects the lender’s financial interest in the property. Most lenders will require a borrower to buy a lender’s policy to issue a mortgage.

Owner’s title insurance protects the owner of the property. If a claim arises, the insurer can help the owner defend against it. They can also pay to settle claims on behalf of the policyholder. There isn’t always a requirement to have an owner’s policy, but it can be a valuable form of financial protection.


A standard title insurance policy can offer good protection. With that said, policies have their limitations. Some policies only cover the basics, and others are more comprehensive. Depending on the coverage, you might need to consider endorsements.

Buyers should review policies thoroughly, consider their needs, and ensure they have the coverage they need. For example, some policies might not cover zoning conflicts. If one arises and you don’t have protection, it could be a significant financial hit.

Title Services in Tennessee

Title Group of Tennessee offers a range of title services for commercial and residential transactions. Click here to reach out to our team. We can help with everything from title insurance to escrow services.

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