Is the title free and clear on the property you wish to buy?

On Behalf of | Jul 1, 2022 | Real Estate & Development

Perhaps you wish to purchase a commercial building that comes with a long history.

Among your priorities is to obtain title insurance to protect your investment, especially in light of issues that a title search may uncover.

Determining ownership

The title to ownership of the building you wish to buy does not involve just a single document; ownership information will appear in a chain of documents. In the case of the property you want, the chain might stretch back for decades. A search could reveal various issues including property liens, boundary disputes, inheritance disputes and inaccuracies in public records.

Shopping for title insurance

The premium for Arizona title insurance is set by state law with the purchase price of the property being the determinant for cost. You should consider purchasing an Owner’s Policy to cover the title search. This kind of policy will address endorsements relating to survey issues, tax matters, special use including zoning, mechanic’s lien coverage and unusual issues such as recharacterization of the property.

Understanding quiet title action

Certain issues can necessitate a legal proceeding called a quiet title action. For example, if there is evidence of fraud in the chain of documents, a break in the chain of documents or ambiguity, the title insurance company cannot issue title insurance until the title is clear and totally free of claims.

Recording a deed

In Arizona, deeds for real property reside at the recorder’s office in the county where the property is located. In order to be recorded, an Affidavit of Property Value must accompany the deed. This is where a search is likely to begin to determine whether the title is free and clear on the commercial building you want to call your own.