Should I Purchase Commercial Property if Title is Defective?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 15, 2021

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The buyer is always free to accept the risk of a title defect, but should first consult a lawyer to make sure the risk is minimal. A title insurance company may be willing to insure for the risk if appropriate affidavits are signed, or if money is placed in escrow to cover the risk. In some cases, the seller may be willing to put money in escrow so there are funds on hand to pay off a construction lien if the lien holder goes to court during the statutory period and wins. If there is a boundary line dispute, you as the buyer may decide to buy the property anyway if only a small piece of the property is involved in the dispute. Your reasoning may be that even if you lose the disputed area, the remaining land that you are buying is well worth what you are paying.

If there is some problem with the building itself, such as a defective heating and air conditioning system, and the seller is not willing to fix it, you may decide that you are getting such a good deal on the building that you will proceed with the purchase despite the defect.

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