Completing and updating a title investigation is essential project due diligence for each conservation easement and conservation fee property your land trust intends to acquire. Evaluating the title early in the transaction ensures you are working with the legal owner and uncovers issues that could impact the project and could ultimately undermine the conservation values you are working to protect. For example, there could be a mortgage on the property that – if the property is foreclosed on – could result in the extinguishment of the easement or there could be a significant tax lien against the property you are trying to acquire.
Updating the title investigation before closing confirms there are no new issues. Bad things have happened to good conservation projects because title issues were not identified and addressed. To meet the accreditation requirements, the title update needs to be completed within 30 days prior to closing. There are several different ways to document this has been completed, such as with an updated title search or title insurance commitment, a title insurance policy, a written communication from an attorney or title examiner that the title investigation was brought current at closing, or written escrow or closing instructions requiring the closing agent or title company to bring the title investigation current. The land trust should contemporaneously document that the update was completed.
To learn more about the Title Investigation requirements, the Alliance has several resources available on The Learning Center (make sure to log-in to The Learning Center before clicking on the links).
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