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How Title Insurance Protects Real Estate Developers

There are so many things that are required for a real estate transaction to close successfully - including all the right loan documents, property transfer paperwork, title searches, inspections, surveys, contracts, and more. Just getting from point A to point B in the process can seem daunting.

Things aren’t any easier for real estate developers. In fact, it could be even more complex due to the nature and sheer size of the deal. With so much going on, is title insurance really necessary for developers? The answer is yes.

What is Title Insurance?

Title insurance is a policy of protection that protects you from any title defects that may arise after you take ownership of the property.

A title search is performed by a title company to ensure that the seller has the right to sell the property and that the title to that property doesn’t have any defects. In other words, you want to confirm that it is free and clear - and that you aren’t getting more than you bargained for.

Title agents are looking for things such as judgments, outstanding tax liens, encroachments, easements, properly recorded deed transfers, and so forth. Should something appear to stand out on the title search, it can either be addressed, such as paying off a judgment - or cause the sale to fall through.

Unlike other types of insurance like health insurance or car insurance, a title insurance policy is a one-time fee paid at closing. It then insures against any of these title defects from the past in case they pop up in the future.

How Title Insurance Protects Developers

It may seem that title insurance is just there to protect lenders or new homeowners, but that’s not all it does. Title insurance protects real estate developers, too. After all, there is a potential for title issues to arise even when a property is still in the beginning development stages - or anytime down the road.

There is often a misconception that just because a property is vacant and doesn’t have any development that it shouldn’t have any title issues. This just isn’t the case. A title search goes all the way to the beginning of a property’s titled existence - and you’d be surprised at just how many times vacant land can change hands. There are plenty of opportunities for issues to impact the title.

Because a real estate developer often buys land for a nominal fee in order to invest a lot in the development of that land makes it even more important to protect rights to it. For instance, it is one thing for a missed judgment to appear right after closing, but it is a different story once millions of dollars have been spent to start building a shopping center.

With title insurance, a real estate developer doesn’t have to worry about anything from the past - and can keep eyes focused on the future.

Title Insurance at District Title

Are you interested in learning more about title insurance? Are you ready to order your title search? The team at District Title is here to help. We diligently search through the entire lifeline of a property before you make that purchase. And we offer you a title insurance policy to protect you after you take ownership.

Contact us today at (202) 518-9300.

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