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The U.S. commercial real estate industry has long attracted investors due to its strength and value appreciation. It reached a market size of $1.2 trillion (as measured by revenue) at the end of 2022. Since purchasing a large commercial property is not as simple as making a purchase at your local convenience store, it makes great sense to understand the process and elements of securing a title for commercial real estate property purchases. 

What is a Title for Commercial Real Estate 

A title is a document that shows legal ownership of a property. It grants the owner the right of possession, meaning that the title holder is the legal owner of the property. It grants the right of control and enjoyment; the title holder can use the property in any legal way. It grants the right of exclusion; the title holder can limit who can enter the property. It grants the right of disposition; the title holder can thus transfer property ownership or dispose of a property.  

7 Tips for Acquiring a Title for Commercial Real Estate 

Before purchasing a commercial property, a prospective buyer will secure a preliminary title report (PTR.) Here are the steps that are involved in a complete title review: 

  1. Confirm ownership of the property to ensure that the buyer is dealing with the property owner.  
  2. Confirm the legal description of the property versus the current owner’s deed to ensure that the legal description has not changed. Then, it will be ascertained what legal rights the current owner has with the property. 
  3. Check for any exceptions and exclusions from the current owner’s title. 
  4. Examine any easements to the property such as rights to use part of the property for access, utilities, or parking. 
  5. Review all underlying documents pertaining to property ownership. 
  6. Review any rights to neighboring land. 
  7. Buy title insurance.                                                                                          

Best Practices for Purchasing Commercial Real Estate Property 

Here’s a list of best practices for purchasing commercial real estate property: 

  • Create a complete and well-written purchase agreement providing all the proposed property transaction terms, timing, and conditions. 
  • Secure all appropriate property ownership disclosures. 
  • Obtain a preliminary title report to start getting a title for commercial real estate. Then, perform due diligence on the title and any permits involved with the property. 
  • Examine local zoning regulations. Assess any requirements that surround the property. 
  • Conduct a location survey and environmental survey
  • Confirm what utilities service the property. 
  • Get an official appraisal. 
  • Purchase hazard insurance. 
  • Determine if there are any leases, assignments, or relationships between the seller of the property and any third parties.                       

Seek Expert Real Estate Services to Find Your Perfect Location 

Caldwell Commercial Real Estate is your trusted partner for commercial real estate in Charleston, SC. We offer leasing and sales, development, and property management services. Our commercial realtors and property managers have extensive experience, so you can rest easy knowing your needs will be met with superior results and satisfaction.