understanding commercial title insurance and extended coverage

Understanding Commercial Title Insurance and Extended Coverage

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Generally, people think of insurance in terms of future protection against an uncertainty such as payments for a future medical condition, coverage for an auto accident, payment for damaged property against storms/floods, etc.

In other words, insurance is often thought in terms of the payment for a future loss due to the occurrence of some future event.



• However Title insurance is a different form of insurance. • It provides coverage for future claims/ losses due to title defects which are created by some past event. • This past event refers to something that happened prior to the acquisition of the property.


1. Forged deeds, mortgages, or releases.2. Instruments executed under fabricated or expired power of attorney.3. Deeds by minors.4. Deed by a partner - unauthorized under partnership agreement.5. Deed by a trustee - unauthorized under trust agreement.6. Deeds by persons who misrepresented themselves. 7. Misinterpretation of wills.8. Mistakes in recording legal documents.9. Falsification of records.10. Deed executed under expired power or attorney.11. Errors in tax record.12. Wrong Survey.13. Defective acknowledgements.

A few of these past risks are listed below so that buyers of commercial property understand why it is important to purchase Title Insurance.


These are few examples of past events which title insurance protects the property buyer against. Each owner’s title policy contains five standard exceptions (also called general exceptions). These exceptions are:

1) Rights or claims of parties in possession not shown by the public records. 2) Encroachments, overlaps, boundary line disputes, or other

matters that would be disclosed by an accurate survey and inspection of the premises. 3) Easements, or claims of easements, not shown by the public record. 4) Any lien, or right to a lien, for services, labor, or material heretofore or hereafter furnished, imposed by law and not shown by the public records. 5) Taxes or special assessments that are not shown as existing liens by the public records.


• An ALTA Survey is required when the buyer/owner seeks to waive these general exceptions. • Title insurance plays a critical role in protecting lender and purchaser investments. In fact, most commercial real estate transactions require title insurance. • Title Insurance firms rely upon a current and accurate land title survey of the property based on the new 2011 ALTA standards.


• A prerequisite to obtaining an ALTA Survey is a current title commitment. • The title commitment will contain the legal description of the property and of any encumbrances to prepare the ALTA survey. • An ALTA Survey will then provide the title company with the information required to insure the title to the land and improvements to the high degree that a commercial development may require.


Smith-Roberts National Corporation is a land survey coordination firm that specializes in coordinating Land Title Surveys for multi-site, multi-state real estate and single commercial transactions.

Incorporated in 1981, Smith-Roberts National Corporation has become a nationwide leader in the Land Survey industry with exceptional service, timely deliveries and reasonable fees. Smith-Roberts National Corp. is a nationwide ALTA Land Survey coordinator and the originator of the DesignReady Survey®.


100 N.E. 5th Street Oklahoma City, Oklahoma 73104

Smith-Roberts

Email: [email protected]

Phone: 405 840-7094 Fax: 405 516-2680 Toll Free: 800 411-2010

mailto:[email protected]


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understanding commercial title insurance and extended coverage

Real Estate