By Christina Kass
Whether you’re just entering the commercial real estate market or are looking to expand your growing portfolio, one thing is certain –— there’s a lot at stake with these highly complex transactions. And, because no two commercial closings are completely alike, each comes with its own set of specifications that can quickly prove overwhelming.
Protecting yourself and your property from many risks involved in commercial closings begins with carefully considering your title insurance coverage options. While it’s easy to assume commercial and residential property title insurance are the same, it’s wise to understand how they differ.
Protection for life’s biggest investments
Title insurance for commercial and residential transactions is evidence that the owner has the right to possess and use the land. Both protect against past occurrences such as unpaid taxes or liens against the property. They also both include two different types of policies: One to protect the investment of the lender and the other to protect the buyer or owner of the property.
Despite some overlap, there are significant differences between commercial and residential title insurance — mainly because commercial transactions may involve much larger monetary investments, far more complicated issues with title and increased due diligence between buyers and sellers. As such, the closing process on business properties can take longer than home closings.
Unlike their residential counterparts, commercial closings follow zoning requirements, environmental laws and property condition assessments, as well as include numerous ALTA (American Land Title Association) title endorsements. Along with increased regulation, commercial transactions typically use a customized PA (purchase agreement), as opposed to a standardized sales contract.
In addition, while the final steps in a residential transaction include a home inspection and appraisal, a commercial closing may require a survey; assignment and assumption of leases document; UCC (uniform commercial code) filing; and more.
Start-to-finish guidance for complex closings
The potential issues surrounding commercial closings make relying on an experienced title company a must. Fortunately, Vanguard Title understands these complexities and has successfully closed thousands of transactions — working with principals, commercial real estate lenders and brokers, investors, attorneys, law firms, asset managers, builders and developers.
According to Amanda Shamoun, commercial account manager, Vanguard has the expertise to prevent unforeseen problems. “We have many years of experience which helps us figure out how to make any transaction work,” she says. “People can rely heavily on Vanguard to walk them through a process they may never have had experience with.”
Shamoun adds that Vanguard is uniquely poised to handle commercial closings due to its in-house legal counsel, enabling the company to evaluate risk and give practical solutions en route to closing. Plus, Vanguard’s foundational partnerships with the nation’s largest underwriters provide pricing and insurability options.
The commercial team at Vanguard draws on its diverse background to better understand and service its customer base. “Together, we have many years of commercial and residential title insurance experience, as well as a passion for customer service,” Shamoun continues. “We are able to see each transaction from the perspectives of all parties involved, and tweak our interactions with them to give each party the best possible service.”
Assuming that commercial and residential title insurance is the same can result in significant losses. The commercial title experts at Vanguard Title can walk you through the entire process, safeguarding your investment from the first handshake to the last.