YOU ASK:

What is commercial land title insurance?

WE ANSWER:

Commercial land title insurance protects commercial property titles - often this is at a national (and even international) level.

Commercial land title insurance is similar in concept with homeowners title insurance in that it aims to protect the interests of the persons insured for losses due to problems with the title. However, since commercial land involves a great deal of money - often reaching millions and even billions of dollars, insurance companies are more lenient in crafting the coverage based on the needs of a specific insured.

The typical coverage of commercial land title insurance will protect the insured so that:

  • The property's title is legally transferred and vested in the insured or policyholder
  • The title has no encumbrances or clouds whatsoever
  • The property will remain marketable and its value will not be diminished by problems related to the title
  • The insured will have proper access to the property

Other enhancements to commercial land title insurance will include:

  • Protection with respect to matters of insolvency and expropriation
  • Protection with respect to government power
  • An expansion of the definition of the term ‘insured' to include successors or heirs of the title, as well as shareholders, grantees and partners, especially in reorganizations. This will make it easier for the company to restructure without having to make endorsements for additional insured persons
  • An expansion of the term "unmarketable title" to include lenders and lessees that refuse to advance or lease
  • Indemnity in the event that the defense against claims on the title proved unsuccessful
  • Provision of survey coverage - for policies at a certain dollar threshold

As for commercial lenders' title insurance, this will cover and protect the lending institution or bank in that:

  • The mortgage is assured to be enforceable and valid
  • The mortgage is prioritized over construction liens
  • The assignment of the mortgage is enforceable and valid

Commercial land title insurance may also provide for additional coverage by way of specific endorsements. These can include:

  • Identity endorsement (with regards to who is the insured owner)
  • Access endorsements (to protect against access to the property - i.e. if the company wants to offer drive-through service, the property should be accessible to vehicles)
  • Title problem endorsements
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