Zoning Title Insurer Report
Buying commercial real estate is a complex undertaking and there are several risks involved. Losses on commercial real estate loans pose a big risk to investors, lenders and banks. Other risks like location, liens, encumbrances, zoning, legal, environmental, for example, also need to be managed.
Lenders and Insurance companies are being very careful today by conducting a thorough due diligence before committing. One component of funding includes title insurance. Lenders require the borrower to purchase title insurance for the commercial real estate property. Title insurance protects lenders and borrowers against events that may have occurred in the past with the property or previous owners. Title insurance protects against claims from defects such as encroachments, liens, encumbrances, easements, fraud and more.
Also the new 2011 ALTA/ACSM requirements affect Title Companies. One significant revision is to Optional Table A - Item 6 (almost always requested by the lender) requires the title insurer to provide an accurate zoning designation and all applicable zoning code requirements to the surveyor. This represents yet another obligation of the title insurer in an already complicated process. Title insurance protects lenders and borrowers against events that may have occurred in the past with the property or previous owners. Title insurance protects against claims from defects such as encroachments, liens, encumbrances, easements, fraud and more
A title insurer (or "title company") will first execute a "title search," that is, it will do a complete due diligence research and investigation against public records. Zoning compliance is almost always part of this research. The Title Insurer Report documents in details the liens, easements or other encumbrances on the land. These will then be listed as "exceptions" to insurance coverage.
The Planning & Zoning Resource Corp. (PZR®) has been providing zoning due diligence since 1994 and is the sole provider of the PZR Report®. PZR® has worked with all major title companies over the years and continues to provide zoning analysis and documentation allowing your insurer to issue their Zoning 3.1 Endorsements. Order Title Insurer Reports from PZR®.