An abstract of title is a synopsis of a property's legal history (including any claims and proceedings). Commonly, the seller pays for an abstract, thus allowing the buyer to analyze the property thoroughly before the purchase. Although it isn't a legal document, a title insurance company uses an abstract as the source for issuing title insurance. The summary is composed of every transaction made with the commercial property - chronologically - including names, deeds, mortgages, etc. Abstracts of title are updated every time a property is sold. Cyclically, the abstractor (creator of the document) conducts research on liens (legal claims on property for payment on debt), bankruptcies, and other important data.
Title insurance provides security for CRE buyers. It protects against loss from defected title (unmarketable title) and from the unenforceability of mortgage liens. Title insurance is derived from abstracts/public records of known claims against the property. Though practically all-inclusive, title insurance does not cover all problems. For instance, boundary issues (made clear in a survey) are outside the scope of title insurance. Similarly, though extremely comprehensive, abstracts aren't bullet-proof. That is, there may be unrecorded liens and unpaid utility bills. An attorney, once again, would be helpful in outlining title insurance limitations for the prospective buyer.
Other types of insurance opportunities to consider are: property damage insurance and rent interruption.
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