Understanding the nuances of title insurance policies is crucial for property owners and investors. The core purpose of these policies is to address the risk associated with matters such as vesting, encumbrances, taxes, and survey matters.
While they are based upon a foundation of protection, title policies include specific exclusions that impact the coverage provided. These gaps in coverage present potential risks that property owners and lenders need to address.
Beyond these exclusions, specific exceptions further limit coverage. These exceptions are, for the most part, matters found in the public record and can include:
- Assessments from the local jurisdiction.
- Easements for utilities.
- Recorded severances of mineral estates.
It is not uncommon for such matters to present a risk that concerns a prospective owner or lender.
Endorsements can provide coverage for the risks arising from those exceptions that have been identified, as well as the exclusions to supplement the covered risks found in the policy.
Endorsements are pivotal in a comprehensive title insurance strategy in commercial real estate. They address specific exclusions, special exceptions, and unique property risks. In doing so, endorsements customize the basic policy to precisely meet the nuanced needs of property owners, investors, and lenders.
Understanding and leveraging these endorsements can significantly protect a commercial real estate investment.
To learn more, join us for the second session of our 2024 Title Camp CLE webinar series – Endorsements for Commercial Real Estate, with underwriters Jonathan Buss and Kirk Strandjord on Thursday, June 20.
