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Welcome to the
Benchmark Title Company's Title Tip of the Week Newsletter. This
week we discuss issues related to commercial real estate transactions.
Commercial Real Estate Transactions
by Doreen Miller, Esq.
Commercial Real Estate Transactions are more complex than
residential closings. Legal and lender representatives often
have a multitude of issues to review before closing. A few
common areas of concern are listed below:
- Entities such as
corporations, limited liability companies, partnerships and
limited partnerships are usually named as the buyer or seller in a
transaction. The title company will require organizational
documents and proof of good standing. Good Standing
Certificates may be obtained by contacting the Secretary of State
of the applicable state. Title companies
usually require that a corporation, limited liability company
or limited partnership be authorized to do business in the State
of Illinois. A resolution will also be required to be
signed by an authorized party of the entity. Non-profit
organizations may have to provide by-laws and minutes of the
meeting in which the transaction was voted upon and approved.
- Title concerns will be of paramount
importance. A buyer's representative may work with the title
company to revise the commitment to remove title exceptions.
Affidavits, surveys and additional investigations may be
required. If "extended coverage" or the deletion of the
standard exceptions is required on the final policy, the title
company will require a current ALTA (American Land Title
Association) survey certified to the Underwriter and the Title
Company showing all improvements, rights of way, easements and
encroachments (if any) and an ALTA statement will need to be
executed at closing. The buyer or lender may require
additional specialized endorsements. The title company
should be advised as soon as the buyer's attorney or lender's
attorney is informed of the list of endorsements. The title
company will advise these representatives of the clearance
documents required to obtain these
endorsements.
- One
of the parties to a commercial transaction may be involved in a
1031 tax-deferred exchange. This is a transaction under
federal law that permits a party to defer paying capital gains tax
when a party relinquishes property and replaces it with other
property(s). To qualify, parties have to follow very
specific rules. We facilitate these transactions
however we do recommend that any party contemplating a 1031
exchange confer with their accountant and/or attorney beforehand
to be sure they will gain the maximum benefit. A more
comprehensive discussion of 1031 exchanges will be made in a
future title tip.
- Most commercial transactions are
"people-less". In other words, many of these transactions
are completed through overnight deliveries and wires. All
parties should provide complete contact information and written
wire instructions to the title company to facilitate
communication. If parties will not attend a closing, the
title company should be informed as soon as possible. In
addition, the name of the purchaser should be considered well
before closing. Changing a purchaser name at the last minute
may delay closing. New clearance items must be produced for the
new purchaser. In addition, a commercial lender may have to
redraft their documents to accommodate the change in
name.
Any questions can be directed to
Benchmark Title at 618-239-3750. Please feel free to call or
email:
Serving you from three convenient locations:
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Main Office:
1124 Hartman Lane
Shiloh, IL 62221
Ph: 618-239-3750
Escrow Fax: 618-239-3707
Title Fax: 618-239-3757
Fax Orders: 618-310-1589
President: John Howe
www.benchmarktitle.net
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318 North Main St.
Columbia, IL 62236
Ph: 618-281-9700
Fax: 618-281-9705
Manager: Randi
Schur
4215 S. State Rte 159
Glen Carbon, IL 62034
Ph: 618-288-1695
Fax: 618-288-1852
Manager: Sara Sowell
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Our mailing address is:
Benchmark Title Company, LLC
1124 Hartman Lane
Shiloh, IL 62221
Our telephone:
618-239-3750
Copyright (C) 2007 Benchmark Title Company, LLC All rights reserved.
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