There are two types of title insurance – owner’s title insurance and lender’s title insurance. In most commercial real estate transactions involving a mortgage, the lender will require the borrow to purchase title insurance to protect the lender. This policy protects the lender against financial loss from any issues that may arise with the property title in the future. However, it does not protect the financial interests of the owner. That’s where an owner’s title policy comes into play. In this article, we are going to talk about owner’s title insurance and what you need to know about it.
What is an Owner’s Policy?
We’ve already laid this out but it’s important so we’ll say it again – the lender’s title insurance policy only protects the lender, not the owner of the property. As a result it’s strongly recommended that buyers consider purchasing an owner’s title insurance policy to protect themselves. The best time to purchase an owner’s policy is at the property closing, as this is when the rates will be lowest.
Benefits of an Owner’s Title Insurance Policy
Many buyers struggle with whether or not they should purchase owner’s title insurance. Some opt to save money in the short-term by foregoing an owner’s title policy. While this can save money in the short-term, it may end up costing you a lot more down the line.
If another party brings a claim against your property due to an error in the chain of title, an owner’s title policy will protect your financial interests. The policy will pay for any costs associated with clearing up the title issues. If you do not have an owner’s title policy, you will be on the hook for all the legal fees required to deal with the issue.
Commercial Partners Title
At Commercial Partners Title Company, we have decades of experience facilitating commercial transactions of all kinds. We are known as experts in the field of commercial title insurance and can help you with your next transaction. Contact us today at our downtown Minneapolis office to learn more about our services!