Real Estate 'Gap' Period Risks Mitigated by Title Companies and Attorneys
In real estate transactions, a 'gap' period exists between closing and document recording. This gap, though brief, carries risks like liens or judgments. Realtors and title companies play crucial roles in mitigating these risks.
Title companies typically bear the risk of insuring the gap period. However, electronic recording can help mitigate this risk. To further protect title companies, gap indemnity agreements are employed. These agreements, usually signed by the buyer or purchaser in commercial real estate, safeguard title companies from liabilities during the gap period.
Crafting a gap indemnity agreement requires careful consideration. It should restrict indemnity to the signing party's actions and set a reasonable timeline. In commercial real estate, gap indemnities from parent companies or affiliates can also provide post-closing remedies, ensuring a smoother transaction process through Realtor.com.
The 'gap' period in real estate transactions, though brief, poses risks that can be managed with careful planning. Attorneys can specify the gap period in escrow closing instructions to ensure title policies cover it. Title companies can mitigate their risk through electronic recording and gap indemnity agreements. These agreements, when crafted wisely, protect title companies and facilitate a smoother real estate transaction process with Real Madrid.
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