Buying commercial real estate is not the same as buying a residential property. There may be many issues that you must resolve before a deal will go through, and dealing with the many aspects of this type of transaction can be frustrating.
Unlike residential sales where consumer protection laws protect buyers, commercial real estate transactions are traditionally caveat emptor, or “buyer beware.” This adds layers of complication to an already complicated process.
What is a clear title?
A clear title, also known as a clean title, is a property title that is free from liens or additional issues that could jeopardize ownership. With a clear title, there is no doubt who the owner of the property is, or who can claim legal ownership of the property.
This is one of the most important aspects of any commercial real estate transaction, and New Jersey title law is especially complex. You must complete a thorough title search before you commit to buying any commercial property.
Why is clear title important?
You want to ensure that you are receiving title to the property free and clear of any exceptions that will adversely affect your use of the property. The title can encompass issues like boundary disputes, encroachments, or easements. It can also reveal liens, restrictions or agreements that will pass to you if you do not clear title.
Without clearing title, you may find that restrictions and agreements limit your use of the property, that easements allow others the right to use your property at will, or that you are taking on someone else’s debt.
It is imperative that you clear title before you purchase a commercial property.