When buying commercial real estate, it is not enough to confirm that the building looks suitable and the purchase price makes financial sense.

A buyer also needs to understand what property is actually being acquired and what legal interests, restrictions or physical conditions may affect it.

That is where commercial property title and survey review in Maryland becomes an important part of due diligence.

Title work can reveal recorded matters affecting ownership, while a survey can help a buyer understand the property’s physical boundaries and how certain recorded matters relate to the land.

What Is Title to Commercial Real Estate?

In real estate, title generally refers to legal ownership and the rights and interests associated with the property.

When purchasing commercial real estate, the buyer wants to confirm that the seller has the legal ability to transfer the interest being sold and determine what other recorded interests may affect the property.

Those interests could potentially include:

• Mortgages
• Deeds of trust
• Liens
• Judgments
• Easements
• Rights-of-way
• Declarations
• Restrictions
• Certain leases
• Other recorded instruments

What Is a Commercial Property Title Search?

A title search involves examining public records relating to the property and its ownership.

According to the Maryland Insurance Administration, a title agent conducts a title search before settlement to determine whether matters such as open mortgages, judgments, real estate taxes or other liens need to be released or paid.

The search may also identify easements, rights-of-way, declarations and other matters affecting the property.

What Can Be Found in Maryland Land Records?

Maryland land records contain legal documents affecting interests in real property.

Depending on the property, recorded documents may include:

• Deeds
• Mortgages
• Deeds of trust
• Releases
• Liens
• Easements
• Rights-of-way
• Restrictions
• Certain leases
• Other recorded instruments

Each Maryland county and Baltimore City maintains land records through the appropriate Circuit Court Clerk’s Office.

Title Search vs. Title Insurance

These are related but different.

Owner’s Title Insurance vs. Lender’s Title Insurance

Commercial buyers financing a purchase should understand that the lender’s title policy and the owner’s title policy protect different interests.

Lender’s Title Insurance

A lender may require a lender’s title insurance policy to protect its security interest in the property.

That policy primarily protects the lender according to its terms.

Owner’s Title Insurance

An owner’s title insurance policy is designed to protect the insured owner’s interest against covered title risks according to the terms of the policy.

Does Maryland Require a Buyer to Purchase Owner’s Title Insurance?

The Maryland Insurance Administration explains that buyers may choose whether to purchase owner’s title insurance.

However, a lender may separately require lender’s title insurance when financing is involved.

Commercial buyers should discuss available owner’s coverage, exclusions and endorsements with their title professional and legal counsel.

Who Chooses the Title Company in Maryland?

The Maryland Insurance Administration states that the buyer chooses the title insurance company.

A real estate professional may recommend a title company, but the buyer does not have to use that recommendation.

Maryland also advises buyers to verify that the title company or title insurance producer is properly licensed.

What Is a Title Commitment?

Before closing, a buyer may receive a title commitment describing the terms under which the title insurer is prepared to issue a policy.

Commercial buyers should pay close attention to the requirements and exceptions identified in the commitment.

A title commitment should not simply be filed away with the closing documents.

It can contain information that materially affects how the property may be used.

What Are Title Exceptions?

A title insurance policy does not insure against every possible issue.

The title commitment and eventual policy may identify matters that are excluded or excepted from coverage.

Depending on the property, these matters may involve:

• Easements
• Restrictions
• Rights-of-way
• Declarations
• Recorded agreements
• Survey matters
• Other property-specific exceptions

What Is an Easement?

An easement generally gives another person or entity certain rights to use part of a property for a specified purpose.

Commercial properties may be affected by easements involving:

• Utilities
• Access
• Driveways
• Drainage
• Stormwater facilities
• Water or sewer lines
• Shared parking
• Pedestrian access
• Other property rights

Why Easements Matter to Commercial Buyers

An easement may have little practical impact — or it may materially affect what the buyer wants to do with the property.

That does not necessarily make the property unsuitable, but the issue should be understood before the buyer becomes obligated to close.

What Is a Right-of-Way?

A right-of-way can provide a person, governmental entity, utility or other party with rights to travel across or otherwise use part of a property.

Rights-of-way can be particularly important for commercial properties because access affects:

• Customers
• Employees
• Delivery vehicles
• Trucks
• Emergency access
• Utility service

Legal Access vs. Physical Access

A property may appear to have convenient physical access from a roadway, but commercial buyers should also understand whether the property has the necessary legal rights to use that access.

This can be particularly important when:

• A driveway crosses another parcel
• Several businesses share an entrance
• Parking is located on an adjacent parcel
• Truck access crosses neighboring property
• Private roads serve the site

Shared Driveways and Commercial Properties

Shared driveways are common in some commercial developments.

A buyer should determine:

• Who owns the driveway?
• Who has the right to use it?
• Who maintains it?
• How are repair costs allocated?
• Can the access be modified?
• Are trucks permitted?
• Are there recorded agreements governing its use?

Parking Rights Can Be a Title Issue

Commercial listings may advertise a certain number of parking spaces, but buyers should confirm whether those spaces are actually located on the parcel being purchased or are available through another arrangement.

Parking may involve:

• Spaces located entirely on the property
• Shared parking
• Cross-parking agreements
• Parking easements
• Reciprocal easement agreements
• Leased parking

Reciprocal Easement Agreements (REAs)

Shopping centers and multi-parcel commercial developments frequently involve agreements between property owners.

A Reciprocal Easement Agreement, commonly called an REA, may address matters such as:

• Shared access
• Parking
• Drive aisles
• Maintenance
• Signage
• Utilities
• Common areas
• Use restrictions
• Cost sharing

These agreements can remain important even when each building or pad site is separately owned.

Restrictions and Covenants

Zoning is not the only source of restrictions on commercial property.

Recorded private covenants, declarations or agreements may impose additional limitations.

For example, private restrictions could potentially address:

• Permitted uses
• Prohibited uses
• Signage
• Parking
• Building design
• Maintenance
• Operating requirements
• Shared expenses

What Is a Commercial Property Survey?

A land survey provides professional information concerning the property’s physical boundaries and specified features.

The exact information shown depends on the type and scope of survey ordered.

Depending on the survey, it may identify matters such as:

• Property boundaries
• Buildings
• Fences
• Driveways
• Parking areas
• Other improvements
• Recorded easements that can be plotted
• Rights-of-way
• Encroachments
• Other requested survey information

What Is an ALTA/NSPS Land Title Survey?

For many commercial transactions, buyers, lenders, attorneys and title companies may request an ALTA/NSPS Land Title Survey.

This is a detailed survey prepared under nationally established minimum standards used for land-title surveys.

The appropriate survey requirements depend on the transaction, lender, title company and intended use of the property.

Survey Table A Items

An ALTA/NSPS survey can include optional items requested by the parties in addition to the minimum survey requirements.

These are commonly referred to as Table A items.

The appropriate requested items depend on the transaction and may relate to additional information needed by the buyer, lender, title insurer or other parties.

A buyer should not assume that every possible item is automatically included in every survey.

What Is an Encroachment?

An encroachment occurs when an improvement or physical feature extends across a property boundary or into an area where it may not belong.

Potential examples include:

• A neighboring building crossing the boundary
• The subject building extending onto adjacent land
• A fence crossing a property line
• A parking area extending onto another parcel
• A structure extending into an easement area

Encroachments can create legal, financing, title and development concerns.

Why a Survey Matters Even When the Property Is Already Developed

It can be tempting to assume that a survey matters only when purchasing vacant land.

Developed commercial properties can also have significant survey issues.

For example:

• The parking lot may cross parcel boundaries.
• A loading area may depend on neighboring land.
• A building may encroach into an easement.
• A sign may sit outside the parcel.
• Truck circulation may rely on cross-access rights.
• Utilities may cross the property through easements.

Title and Survey Should Be Reviewed Together

The title commitment and survey can be especially useful when reviewed together.

The title work identifies recorded interests and exceptions.

The survey may help show where certain physical and record matters are located in relation to the property.

Commercial Land Purchases Need Careful Survey Review

Survey review can be particularly important when purchasing vacant or development land.

The buyer may need to understand:

• Exact acreage
• Parcel boundaries
• Road frontage
• Legal access
• Easements
• Rights-of-way
• Utility corridors
• Encroachments
• Other site conditions

A parcel advertised as five acres, for example, does not necessarily mean five acres are fully usable for the buyer’s proposed development.

Survey vs. Zoning

A survey and zoning analysis answer different questions.

Both may be important when determining whether a commercial property works for a buyer’s intended use.

Survey vs. Property Inspection

A commercial property inspection and land survey also serve different purposes.

An inspection evaluates physical building or property conditions within its scope.

A land survey focuses on boundaries and other land-related information within the scope of the survey.

Liens and Commercial Property

A lien can represent a claim or security interest affecting property.

Potential title issues may involve:

• Existing mortgages or deeds of trust
• Judgments
• Tax-related liens
• Other recorded liens

Maryland Courts specifically notes that locating all liens can be difficult because different kinds of liens may appear in different records.

That is one reason professional title work can be important in a commercial transaction.

Why Public Record Searches Alone May Not Be Enough

Maryland provides public access to substantial property information.

However, searching a deed online is not necessarily equivalent to performing a complete professional title examination.

Maryland Courts notes that some liens may appear in land records, some may involve court judgments and unpaid taxes may create additional issues.

Title Issues That May Delay Commercial Closing

Title problems do not necessarily mean a transaction cannot close, but they may require additional work.

Potential issues can include:

• Unreleased mortgages
• Liens
• Judgments
• Ownership discrepancies
• Entity documentation problems
• Unresolved easements
• Survey discrepancies
• Boundary concerns
• Other title requirements

Identifying these matters early gives the parties more time to address them before the scheduled settlement.

Commercial Title Insurance Endorsements

Depending on the property and transaction, a buyer or lender may discuss additional title insurance endorsements with the title company and legal counsel.

Endorsements may modify or expand certain policy protections, subject to underwriting requirements and the specific policy.

The appropriate endorsements depend on the property, transaction, survey and identified risks.

Review Title Before the Due Diligence Deadline

Commercial purchase agreements frequently establish deadlines for investigation and due diligence.

Buyers should understand how the contract addresses:

• Title review
• Objections to title
• Survey review
• Seller cure obligations
• Buyer termination rights
• Closing extensions
• Other title-related procedures

Title and Survey Review for Owner-User Buyers

Owner-user buyers should evaluate title and survey issues in relation to how their business will actually operate.

For example, a business may need:

• Customer parking
• Truck access
• Loading areas
• Outdoor storage
• Signage
• Future building expansion
• Utility capacity and access

An easement or private restriction that seems minor in isolation may become important when compared with the buyer’s intended operation.

Title and Survey Review for Investors

Investors should also consider how title and survey matters affect the property’s income and future marketability.

Questions may include:

• Are all tenant parking rights properly documented?
• Does the property have reliable legal access?
• Are shared areas governed by recorded agreements?
• Could restrictions limit future tenants?
• Could easements interfere with redevelopment?
• Are all improvements located within the property boundaries?
• Could a title issue affect refinancing or resale?

Title Review for Shopping Centers and Multi-Parcel Developments

Shopping centers and larger commercial developments can involve particularly complex property relationships.

A buyer may need to investigate:

• REAs
• Cross-access easements
• Cross-parking rights
• Maintenance agreements
• Signage rights
• Use restrictions
• Exclusive-use provisions
• Utility easements
• Shared stormwater facilities
• Cost-sharing obligations

The physical building may represent only one part of the rights and obligations associated with the investment.

Title Review for Industrial Property

Industrial buyers may have additional operational concerns.

For example:

• Can tractor-trailers legally access the site?
• Does truck circulation cross another parcel?
• Are loading areas fully within the property?
• Are outdoor storage areas affected by easements?
• Do utility corridors interfere with expansion?
• Are private road rights adequate for the operation?

These questions demonstrate why title and survey review should be connected to the buyer’s intended use rather than treated as merely a closing formality.

Title Review for Religious, Medical and Other Special-Use Buyers

Special-use buyers should pay particular attention to private restrictions and shared-property agreements.

Even if governmental zoning permits a proposed use, a recorded declaration, covenant or reciprocal easement agreement may require additional analysis.

Buyers should investigate these matters before committing substantial money to architectural plans, permits or renovations.

Commercial Property Title & Survey Checklist

Common Commercial Title & Survey Mistakes

• Assuming the property lines are where the pavement or fence appears to end.
• Assuming advertised parking is entirely on the parcel.
• Failing to investigate shared access.
• Reading the title commitment but not the underlying exception documents.
• Assuming zoning approval overrides private restrictions.
• Assuming the lender’s title policy protects the buyer.
• Failing to compare the survey with the title commitment.
• Ignoring easements because the property is already developed.
• Failing to investigate truck or delivery access.
• Waiting until immediately before closing to review title issues.
• Assuming a public-record deed search is the same as a professional title examination.

Commercial Property Title & Survey FAQs

This article is provided for general informational and educational purposes only and does not constitute legal, title, surveying, insurance, financial or investment advice. Title conditions, surveys, easements, restrictions, insurance coverage and transaction requirements vary by property and transaction. Commercial buyers should consult qualified Maryland attorneys, licensed title professionals, surveyors and other appropriate professionals before making decisions concerning a specific property.