Real estate investors and buyers of commercial property in Nevada often purchase commercial title insurance. Commercial title insurance provides policy holders with protection should an issue arise with regards to the title of the property. Given the current upswing in the commercial real estate market in Nevada, it is important to have a solid understanding of how the commercial title insurance industry is evolving.
Since the recession at the beginning of the century, the commercial title insurance industry has developed an increased awareness of different kinds of fraudulent activities. Systems within the industry have been developed that vet commercial real estate transactions that may be fraudulent. In addition, it is important to ensure that all parties to the commercial real estate transaction have consented to it.
Moreover, due to the fact that commercial real estate transactions are generally much bigger than residential real estate transactions, it is harder for a party to the transaction to commit fraud. This is especially true given the fact that most likely all parties to the transaction will be represented by attorneys. Commercial real estate transactions often go through a greater amount of checks and balances than residential real estate transactions.
However, regulations regarding commercial real estate may be seeing some changes. For example, 1031 exchanges involve the trade of one commercial investment for a second commercial investment. Also known as like-kind exchanges, 1031 exchanges make it so that taxpayers in such situations can defer the capital gains and certain taxes on the deal. However, it is possible that 1031 exchanges will become a thing of the past. This could be bad according to some, as many buyers of commercial real estate choose to buy in Nevada due to the state’s attractive tax laws.
New technology has also affected the commercial title insurance industry. For example, people can sign documents digitally, and documents can be included on one’s title commitment via a hyperlink. These advances in technology have helped make the title process run more smoothly.
As this shows, the commercial title insurance industry is seeing growth and change. It is important for investors and buyers in Nevada to understand how commercial title insurance benefits them. Those with questions about commercial title insurance may want to consult with a real estate law attorney.
Source: Nevada Business, “Covering Your Assets: Commercial Real Estate Title Insurance in Nevada,” Jennifer Rachel Baumer, June 1, 2017