In commercial real estate transactions, a clear title is one of the most important elements to secure before closing a deal. A clouded title can delay or derail the transfer of ownership, create legal headaches and impact the long-term value of the property. Buyers, sellers and investors alike should understand what types of problems might emerge during the title search process.
Several title issues are more common than others, especially in commercial transactions where the chain of ownership and land use history may be more complex. Identifying and resolving these matters early can help avoid costly delays or disputes.
1. Unpaid liens from prior owners
One of the most common title problems is the presence of unresolved liens. These may include unpaid property taxes, construction debts or court judgments against a previous owner. If left unaddressed, they can follow the property and become the responsibility of the new buyer, creating financial risk and limiting the ability to obtain financing.
2. Disputes over property boundaries
Boundary disputes between neighboring property owners can arise due to conflicting surveys, unrecorded agreements or encroachments that were never addressed. In commercial real estate, this could impact parking lots, driveways, fences or other shared spaces. These disputes can lead to litigation and prevent a buyer from having full control of the property.
3. Undisclosed easements affecting land use
Easements give others the legal right to use part of the property for a specific reason, such as utility access or shared driveways. If an easement exists but was never disclosed or recorded properly, it could limit the buyer’s intended use of the land or affect future development plans.
4. Forgery or fraud in title documents
In rare but serious cases, forged or fraudulent documents can appear in the property’s history. This may include a fake signature on a deed or a forged release of a lien. Such issues can create uncertainty about who actually owns the property or whether the title is valid.
Because title issues can involve significant financial and legal consequences, seeking legal guidance during the transaction can help protect your interests and confirm that the title is clear before you move forward.
