Can a single title claim halt a major development’s progress?

Commercial development often requires creative solutions, especially in areas that are already somewhat developed. After all, there usually won’t be large, convenient-to-access parcels of land available at reasonable costs readily available on the market. Those with large, pre-existing parcels will likely charge a premium for the property.

If you want to move forward with the development project, you may need to build your own parcel of property. It is a common tactic for developers to purchase multiple homes or parcels and combine them in order to have enough space for the development of a larger project, such as a mall or housing complex.

Unfortunately, the more parcels and properties you purchase, the more risk you have for a title claim brought by someone against one of the properties you purchase. Will a claim against one parcel out of dozens affect your project?

The placements of the contested parcel will affect the impact of a claim

Title claims can result from a contentious divorce, an improperly managed inheritance and even tax issues. If someone has a potentially legitimate claim to a parcel that you hoped to integrate into your property, you may have to halt development until you resolve the issue, which could drastically delay the timeline for the project.

If the particular property is on the outskirts of the project, you may be able to begin construction or rework certain plans in order to avoid building on a contested property, at least initially. If the property is right in the center of your new parcel or if it is not possible to rework the design to exclude that land, you very well may need to hold all development until you resolve the title claim.

Commercial title insurance can help you fight if someone pushes pause on your project

Commercial title insurance is of the utmost importance for those making property investments for the purpose of development. If a title claim arises, you could be out millions of dollars worth of investment via the property you’ve already purchased.

Title insurance helps you defend against claims by covering the cost of an attorney to defend your ownership. It can also reimburse you for the losses you suffer if you move the property because of a valid title claim.