The Power of Efficiency with Title Insurance

When it comes to commercial property transactions in Australia, time is often of the essence. Using tools to close a deal swiftly and seamlessly can provide the competitive advantage required to secure an acquisition, and title insurance can play a pivotal role in making this a reality.

The traditional hurdles

In a conventional property transaction, the due diligence process involves an extensive review of historical records and legal documents. This diligent examination is crucial to ensure your ownership rights are protected after you purchase the asset for items such as caveats, encroachments, easements, fraud and potential disputes.

Despite best efforts, unforeseen title issues may still arise post settlement, causing headaches for property owners and reducing returns.

Enter title insurance

First Title's commercial title insurance product, Commercial Solutions  can assist in the deal process by providing a safety net against potential title risks.

Let's explore how this translates into more efficient property transactions:

Faster Decision Making: knowing that title insurance is in place empowers buyers, sellers, and lenders to make decisions with confidence. The assurance of financial protection can allow all parties to proceed with the transaction more swiftly.

Real life examples:

1. Consider the case of a commercial property deal where a previously unknown zoning restriction is discovered during due diligence. Without title insurance, this could lead to lengthy negotiations or even the abandonment of the deal. However, with title insurance covering zoning issues, First Title can assess the risk and if comfortable, provide an endorsement in the policy for that item which means that if the issue arises down the line, the risk is transferred from the property owner to First Title. This may allow a transaction to proceed smoothly, as the policyholder is protected against potential losses.
   
   
2. In another scenario, a survey discrepancy is identified in an old survey just days before the scheduled settlement date. Without title insurance, this would likely lead to delays for a new survey to be completed, renegotiations, or even the collapse of the deal. A title insurance policy and an endorsement in this scenario could protect the insured against risks associated with any survey errors, and if loss is suffered after settlement, First Title would seek to rectify or compensate for the loss. In many cases this has allowed deals to complete without waiting for a new survey, provided the lender is comfortable with the policy and the endorsement.
   
   
3. A commercial property development has a pre-agreed purchase from a counterparty at the end of development completion - subject to an Occupation Certificate (OC) being received from council. 
    
   Delays in documentation may mean settlement is pushed out until required certificates are received from council. In certain circumstances, upon assessment of the particular risk we may be able to gain comfort that documentation is imminent and only a procedural delay, and provide a specific endorsement to cover receipt of certificates for a short time period. This could allow settlement to proceed.  
    
   Our global business closes deals like this regularly and it is a great way to speed up settlement of transactions.

The bottom line

Efficient deal flow by incorporating title insurance translates into a more dynamic and agile commercial property market. Investors can seize opportunities and deals can be finalised with confidence, knowing that the safety net of title insurance is in place.

In the fast-paced world of commercial real estate, time is money. First Title's Commercial Solutions product is not just about protection; it's about empowering property owners and investors to navigate the transaction process with speed and certainty.

Get in touch on 1300 362 178 now or read more to see if Commercial Solutions is right for you.