We get it. Business owners want to save every dollar of start-up costs that they can. There certainly are ways to cut corners but neglecting to purchase a title insurance policy is not one of the better ways to save money.
Let’s further explore the importance of title insurance for business owners.
It’s a new build
If you are purchasing a building that was newly constructed, you may think that it hasn’t had the chance to be encumbered already. But one very common situation that can arise from new construction is that one or more subcontractors or material suppliers may not have gotten paid by the contractor for their labor or supplies.
A material man’s lien could get attached to your new business property, causing complications and expenses for you down the road. Title insurance can provide a layer of protection for your business against such claims.
You purchased a family-owned property
Perhaps one of the reasons for the sale of the family-owned and operated restaurant or retail store was discord among the family members. Especially when dealing with their property, it is vital to ensure that no disgruntled family members have failed to sign off on the sale.
It establishes a clear paper trail for future sales
You may intend for the business to be a short-term investment for you to flip successfully to a new owner. As a selling point, you can show that at the time of your purchase, there were no encumbrances or liens on the business.
Seek guidance through all steps of the process
Business acquisitions can be tricky. It helps to learn all that you can about the legal issues surrounding your new business property.
