Commercial Transactions

Avoiding surprises is a critical element for success in any investment. When a title company performs its services it can act proactively for the investor to avoid surprises. 

Competency is the baseline service that a title company needs to earn a seat at the commercial closing table. However, investors need a title company with a special proactive view of the deal, where nuances are predicted early enough to help avoid disturbing the relationship of the parties. At ZTA, our competency level runs deep, with a long track record of successful commercial deals where the nuances were identified and handled before reaching the closing table.

Managing and negotiating a real estate contract and a closing is sometimes an art. Viewing it as a series of checklists and requirements neglects the human component of the transaction.  The difference between a buyer discovering an issue that could cause delay early in the contract lifespan vs. right before closing has incredible impact in making sure the deal does not blow up before closing.   

As a title company, we work to take the stress off the buyer and their service team by having our head in the game with them, even when it strays slightly outside of title insurance policy we are providing; we are a player on the team and contribute by keeping track of key items such as survey revisions for the lender.  This is done simply by paying attention and making sure nothing slips through the cracks. 

To make this tangible, we can use a few simple samples from a recent transaction sample. 

♦ Historical Data: During the due diligence, a tideland grant was recorded in the land records.  Since the grant was obtained as a result of the sellers making a title claim with their insurance carrier, they were not aware of all of the details. The grant referenced a 4-year-old survey, which was sure to have recent and historical markings that would be important for the buyer to have in its records due to the proximity to a water course and changing nature of the boundaries.  We tracked down the 2014 survey with diligent ego-free stalking of the parties that had a copy and were able to obtain it for the buyer’s records.  In all likelihood, this will illustrate historical data for the buyer, if and when environmental regulating bodies-present a challenge in the future.

♦ PZR Zoning Report: Although the endorsement requests by the lender are not finalized during the initial study period of the contract, we request information and documents we might need to underwrite in order to provide the commercial lender frequently requested endorsements.  Therefore, the PZR Zoning Report was presented to us early during due diligence to rely on in issuing the Zoning Endorsement.  The content of the PZR report meets our needs for issuing the Zoning Endorsement.  However, it was missing an additional and very different use of one of the buildings on the large tract of land.  The secondary use is mentioned in the contract,so the lender’s counsel would likely notice it once they dig in and do a deep dive into all the transaction documents. We notified the buyer of what we noticed, so they could get ahead of this is a last-minute glitch slowing things down and also make sure the use is grandfathered in or permissible by zoning variance.

♦ No Easement for Neighbor’s Use: Apparent use of the subject property by the neighbor based on driveway curb cut, although there is no easement of record for said use.  Our service option is to see it, set it up as an exception in general terms and then let the buyer’steam discover (or not discover) this as they read through the materials and examine the survey.  The other option,which is how we manage our files, is to send a separate email and just note that it looks like the neighbor’s driveway is paved in one location to get directly onto our driveway, but there is no easement for it in the records.  Early on in the diligence period, the buyer was able to determine whether they want to request the seller to coordinate an easement with terms, rights and obligations, before the buyer is the owner of the property.