When you buy commercial property in Utah, you must thoroughly review the title report. Understanding each component of the report can help you avoid potential pitfalls. If you can identify some key red flags, you can better ensure you reduce the number of issues you may face when you buy a commercial property.
Liens and encumbrances
Liens and encumbrances can significantly impact your ownership rights and the property’s value. Common liens in real estate include unpaid taxes, mortgages, and contractor debts. Ensure all liens are resolved before purchasing the property to avoid inheriting financial obligations.
Easements and Right-of-Way
Easements grant others the right to use a portion of your property, which can restrict your control over the land. Look for easements that might affect your ability to develop or use the property as intended.
Property boundaries
Discrepancies in property boundaries can lead to disputes with neighboring property owners. Ensure the title report accurately reflects the property’s boundaries and consider getting a professional survey to verify the information. Boundary issues can complicate future expansions or renovations.
Zoning restrictions
Zoning laws dictate the usage of property. Review the title report for any zoning restrictions that could impact your business operations. Ensure the property’s zoning aligns with your intended use to avoid costly legal battles.
When buying commercial property in Utah, carefully review the title report for all the mentioned red flags. You can also check for CC&Rs, pending legal actions, and environmental liabilities. Addressing these concerns early can help you avoid costly complications and ensure a smooth transaction.