Title and Survey Conditions in Commercial Real Estate Transactions

In the due diligence process of commercial real estate transactions, title and survey contingencies are fundamental. They require thoughtful consideration and refined understanding due to the complexity they present.

In real estate transactions, a title—the legal document that indicates ownership—is essential. The procedure, however, can be restricted by problems like liens, encumbrances, or unresolved ownership disputes. A title contingency can be helpful in this situation. Potential buyers can fully investigate the status of the title thanks to a title contingency clause. If significant problems are found, the buyer can back out of the deal without facing financial consequences, protecting their investment, and in most instances, receiving a full refund of their earnest money deposit.

A similar situation applies to survey contingencies. A survey provides important data that could have a big impact on the property's value and intended use by revealing exact property boundaries, zoning classifications, and potential encroachments. If the survey reveals significant concerns, a survey contingency clause gives the buyer the chance to better understand these issues, renegotiate the terms, or even back out of the agreement.

When properly utilized and understood, these contingencies offer significant buyer protection. They serve as important tools in the transaction process for commercial real estate, not just legal formalities. Therefore, when planning any real estate transaction, careful consideration should be given to the title and survey contingencies to ensure the security and economic viability of the investment. Atik Law Firm is dedicated to protecting potential buyers from title and survey issues and ensuring you make the most of these contractual contingencies.