Title Insurance in Commercial Real Estate
Title insurance is required by virtually every commercial lender and worth understanding even when not required. Unlike most insurance products, title insurance protects against past events that have not yet been discovered, and the premium is paid only once at closing.
Owner's Policy vs Lender's Policy
Two separate policies are typically issued at closing: an owner's policy that protects the buyer's equity interest and a lender's policy that protects the lender's lien position. Both have separate premiums, though they are often discounted when issued together.
What Title Insurance Covers
Coverage includes undisclosed prior liens, forged deeds in the chain of title, errors in public records, undisclosed heirs, easements not reflected in the recorded title, and other defects that title search did not uncover.
What It Does Not Cover
Standard policies exclude items listed as exceptions on Schedule B of the policy — known easements, recorded restrictions, leases, and any 'matters that an accurate survey would disclose.' Extended coverage policies cover some of these but cost more.
Endorsements
Endorsements add specific protections: zoning compliance, access, environmental matters, contiguity for multi-parcel deals. Commercial transactions often require multiple endorsements that residential deals do not.
Educational content only — not advice. KQT Advisors, LLC is a commercial loan broker; we are not a lender, attorney, accountant, financial advisor, or fiduciary. We do not originate loans or make lending decisions. The information in this article is provided strictly for general informational and educational purposes and reflects our understanding at the time of writing. It is not — and must not be construed as — financial, tax, legal, accounting, investment, or any other professional advice, and creates no advisor-client relationship. Loan programs, rates, terms, eligibility requirements, fees, and approval criteria are set by individual lenders, the SBA, and other parties and are subject to change at any time without notice. Examples are illustrative only and not guarantees of outcome. Nothing here is a commitment to lend, an offer of credit, or a representation that any specific structure will be available to or appropriate for any borrower. Always consult your own qualified financial, tax, and legal advisors before acting on any information in this article. To the maximum extent permitted by law, KQT Advisors, LLC and its principals, employees, agents, and affiliates disclaim all liability for any direct, indirect, consequential, or incidental loss or damage arising out of any use of, reliance on, or inability to use the information in this article.