Title insurance can help protect you and your property from potential claims and past defects in the chain of title. But many people don’t realize that there are two types of title insurance, both of which are important when purchasing a commercial property. This article will take a look at the differences between the two types of commercial title insurance – the lender’s policy and the owner’s policy.
Lender’s Title Insurance
The first type of commercial title insurance is called lender’s title insurance. A lender’s policy is generally required by your lender when purchasing a property and the borrower is typically responsible for paying for this insurance. Basically, this policy states that the financial institution (the lender) has an enforceable lien on the property. In other words, it protects the lender and their interest in the property.
Owner’s Title Insurance
The other type of title insurance is called owner’s title insurance. An owner’s policy protects the owner of the property (rather than the lender) from any title issues that may present themselves in the future. While owner’s title insurance is typically not required, it is always recommended when investing in commercial real estate. If any defects in title are discovered and a claim is brought on your property, owner’s title insurance will pay for any associated legal fees to defend your title.
Minnesota Commercial Title Company
Both owner’s and lender’s insurance are important to protect your property in the event that someone brings a claim against it. At Commercial Partners Title, our team of title closers, escrow agents, and underwriters has decades of experience aiding Minnesota clients with their commercial real estate transactions. We are recognized as experts in commercial transactions across the country. Contact us today at our Minneapolis office to speak with our team about your commercial real estate transaction.