A title problem found before a Missouri commercial real estate closing can delay a loan, disrupt building plans or add costs. Buyers, sellers and lenders use title searches to check for claims against the property.
Even when everyone is ready to close, these four issues can cause delays:
1. Mechanics’ liens from unpaid construction work
Under Missouri law, contractors and suppliers may file mechanics’ liens for unpaid work or materials. Original contractors must give owners a written notice before receiving payment. Subcontractors and suppliers generally must give owners at least 10 days’ notice before filing a lien. These liens are legal claims against property for unpaid construction costs. They can delay closing if buyers or lenders require the seller to resolve them.
Payment records, lien waivers and releases can help show whether unpaid claims have been resolved.
2. Missing proof of signing authority
When an LLC or corporation sells property, the person signing the sale documents must have the right to act for the business.
Title insurers need to verify that the person signing has authority to act for the business. They may require operating agreements, corporate resolutions, formation documents or proof of good standing. Missing records can delay closing.
3. Property records and survey issues
Title searches and land surveys may uncover problems with ownership or how you can use the property, such as:
- Unpaid property taxes
- Fences or structures that cross property lines
- Easements, which give others rights to use part of the land
- Errors in the legal description that identifies the property
Some concerns may require additional documentation, corrected records or agreements between affected parties before closing.
4. Judgment liens against the property
Under Missouri law, circuit court judgments generally create liens against a debtor’s real estate in the same county. Judgments from other counties require additional filing to create liens there. Some other judgments also have special filing rules. These liens can make it harder for buyers to get clear title or financing.
Depending on the circumstances, the parties may address these liens through payment, formal releases or other arrangements acceptable to the buyer, lender and title insurer.
Resolving title issues before closing
A title problem does not always mean your transaction cannot proceed. The available options depend on the purchase agreement, the nature of the issue and the parties’ closing requirements. An attorney can help you evaluate outstanding claims, review contractual obligations and negotiate possible resolutions. Understanding these options can help you address concerns before they cause further delays.
