Title Insurance and ALTA Surveys in Commercial Real Estate

Most commercial buyers know they need title insurance. Fewer understand what the policy covers, what it leaves out, and how much of that coverage depends on the survey. A title policy is only as useful as its exceptions, and many important exceptions can be removed or narrowed only if the buyer does the work during due diligence.

This article fits within our commercial real estate due diligence checklist and should line up with the title and survey provisions in your purchase agreement.

What Is a Title Commitment and How Should You Read It?

A title commitment is the insurer’s offer to issue a policy once stated conditions are met. It identifies the proposed insured, the coverage amount, the current owner of record, and the legal description. The two parts that matter most are the requirements and the exceptions.

The requirements are what must happen before the policy issues: paying off and releasing existing deeds of trust, recording the deed, delivering an owner’s affidavit, providing entity authority documents, and resolving judgments or liens found in the search.

The exceptions, usually in Schedule B, are matters the policy will not cover. Standard exceptions appear in nearly every commitment, such as rights of parties in possession, matters a survey would disclose, and unrecorded liens. Specific exceptions list recorded easements, covenants, utility agreements, and leases. Each specific exception should be pulled and read before the contract’s objection deadline. You want to know now whether an easement crosses the planned building pad or a covenant restricts your intended use.

What Is the Difference Between Standard and Extended Coverage?

In general terms, standard coverage insures against defects in the public record, while its standard exceptions carve out off-record risks such as survey matters, parties in possession, and unrecorded mechanic’s liens. Extended coverage, as the term is commonly used, removes or limits some or all of those exceptions. The insurer typically requires a current survey and an owner’s affidavit first. Coverage and premiums vary by state and insurer, so ask the title company early what it needs to delete each standard exception.

Do You Need an Owner’s Policy, a Lender’s Policy, or Both?

The current national forms are the ALTA 2021 Owner’s Policy and the ALTA 2021 Loan Policy. A loan policy protects the lender’s lien, generally only up to the outstanding debt, and does not protect the buyer’s equity. A lender will almost always require one.

An owner’s policy protects the buyer’s interest up to the policy amount, usually the purchase price. It is optional, but skipping it means the buyer carries title risk on its own investment. Who pays is a matter of contract and local custom and should be settled in the purchase agreement. If you will take title in a new entity, the commitment should name that entity as the proposed insured. Our article on holding commercial real estate in an LLC explains why the vesting entity matters.

Which Title Endorsements Matter in a Commercial Deal?

Endorsements add or clarify coverage for specific risks, and they are where much of a commercial policy’s value lies. The numbers below refer to national ALTA forms, but availability depends on the state and insurer. Virginia and North Carolina each have their own rate and endorsement filings, so confirm with the issuing underwriter which forms and versions it can issue for your property, the premium, and any conditions.

Not every deal needs every endorsement. The right package depends on the property, the use, and the lender’s requirements.

What Changed With the 2026 ALTA/NSPS Survey Standards?

An ALTA/NSPS Land Title Survey is a detailed boundary survey prepared under national standards adopted by the American Land Title Association and the National Society of Professional Surveyors. The 2026 Minimum Standard Detail Requirements took effect February 23, 2026, replacing the 2021 standards. Surveys ordered now should be prepared and certified under the 2026 standards.

The standards set a baseline for every ALTA survey. Beyond it, optional Table A items, such as flood zone classification, zoning information, and utilities, are included only if selected. The buyer, lender, and title company should agree on Table A items before the survey is ordered, because some endorsements depend on them. The survey should also be certified to the buyer, the lender, and the title company. An old survey certified only to the seller may not support the coverage you want.

How Does the Survey Support Title Coverage?

The survey connects the paper record to the ground. It shows boundary encroachments in either direction, where recorded easements fall relative to the building and parking, and whether the property has access. Those facts let the insurer narrow the general survey exception, reveal matters the buyer may object to under the contract, and support endorsements like ALTA 17, 19, 25, and 28.

Flood zone information also affects financing. Federally regulated lenders may not make, increase, extend, or renew a loan secured by improved real estate in a FEMA special flood hazard area unless flood insurance is maintained for at least the lesser of the outstanding loan balance or the maximum coverage available under the National Flood Insurance Program (42 U.S.C. § 4012a(b)). The rule applies to commercial as well as residential collateral. For coastal and low-lying property in Hampton Roads and eastern North Carolina, answer that question early.

Why Is Mechanic’s Lien Risk a Title Issue?

Contractors and suppliers can file liens after their work is done, so a lien can appear after closing for work performed before it. In Virginia, a memorandum of mechanic’s lien must be recorded within 90 days after the last day of the month in which the claimant last performed work or furnished materials, and no later than 90 days after the project is completed or work otherwise ends (Va. Code § 43-4). The lien may not include amounts for work more than 150 days before the claimant’s last work, and suit to enforce must be filed within 6 months after recording or 60 days after completion, whichever is later (§ 43-17). In North Carolina, a claim of lien must be filed with the clerk of superior court within 120 days after last furnishing (G.S. 44A-12).

Because of this gap, title companies typically require an owner’s affidavit addressing recent work, and buyers and lenders often ask for mechanic’s lien coverage. After recent renovations, ask for lien waivers too.

What If a Title Problem Cannot Be Fixed Before Closing?

Many title problems are cured with a release, corrective deed, or affidavit. Others, such as a break in the chain of title, a missing heir, or a competing ownership claim, may require a court order through an action to quiet title. Because that takes time, the purchase agreement should give the buyer clear options: extend closing while the seller cures, accept insurance coverage over the defect, or terminate and recover the deposit.

How Do Virginia and North Carolina Title Rules Differ?

Virginia: Race-Notice Recording

Under Va. Code § 55.1-407, an unrecorded deed or contract is void against purchasers for value without notice and lien creditors until it is recorded. This is commonly described as a race-notice rule: a later buyer generally prevails over an earlier unrecorded interest only if it paid value and took without notice. What a buyer learns from the survey, a site visit, or the people in possession can bear on whether it had notice, so review all of them carefully. See Buying or Selling Commercial Real Estate in Virginia for the full closing process.

North Carolina: Pure Race, Attorney Opinions, and the Lien Agent

North Carolina’s Connor Act, G.S. 47-18, provides that conveyances, contracts to convey, options, rights of first refusal, and leases of more than three years are not valid against lien creditors or purchasers for value until recorded, with priority following recording order. North Carolina courts describe this as a pure race statute. A purchaser who records first generally wins even with actual notice of an earlier unrecorded deed, with limited exceptions such as a recorded lis pendens.

Under G.S. 58-26-1, a title insurer may not insure North Carolina real property until it obtains the opinion of a North Carolina-licensed attorney, who is not its employee or agent, after a reasonable title examination. Passing upon titles is part of the practice of law under G.S. 84-2.1.

For improvements costing $40,000 or more, other than improvements to an existing owner-occupied single-family home, the owner must designate a lien agent no later than its first improvement contract (G.S. 44A-11.1). Contractors and suppliers who do not notify the lien agent within 15 days of first furnishing, or at least before the sale or loan is recorded, generally cannot perfect a lien against a bona fide purchaser, and their lien becomes subordinate to a later lender’s deed of trust (G.S. 44A-11.2), and closing attorneys check with the lien agent before recording. See Buying or Selling Commercial Real Estate in North Carolina.

Frequently Asked Questions

Is commercial title insurance required?

A lender will almost always require a loan policy. An owner’s policy is optional, but without one the buyer bears title risk on its own equity.

Can I use the seller’s old survey?

Sometimes, but it may not reflect current conditions, meet the 2026 standards, or be certified to you, your lender, and the title company. The insurer may decline to remove the survey exception or issue survey-based endorsements without a current survey.

Who pays for title insurance in a commercial deal?

It depends on the contract and local custom. North Carolina’s standard commercial purchase form assigns title insurance and survey costs to the buyer, but that is negotiable. In Virginia, the purchase agreement controls.

Does title insurance cover zoning problems?

Not by default. An ALTA 3 series endorsement may provide limited coverage where available. Zoning should also be checked directly, as explained in our article on zoning and land use due diligence.

Related Articles in This Guide

• The Legal Guide to Commercial Real Estate in Virginia and North Carolina
• Commercial Real Estate Letters of Intent: What to Negotiate Before the Contract
• Key Terms in a Commercial Real Estate Purchase Agreement
• Commercial Real Estate Due Diligence Checklist
• Zoning and Land Use Due Diligence for Commercial Property
• Negotiating a Commercial Lease: What Tenants Should Know
• CAM Charges and Triple Net Leases: How Operating Expenses Really Work
• Personal Guaranties in Commercial Leases: Limiting Your Exposure
• Should You Hold Commercial Real Estate in an LLC?
• 1031 Exchanges: Legal Issues, Deadlines, and Common Mistakes
• Buying or Selling Commercial Real Estate in Virginia
• Buying or Selling Commercial Real Estate in North Carolina

This article provides general information only. It is not legal, tax, or financial advice and does not create an attorney-client relationship. Laws differ by state and change over time. Our attorneys are licensed in Virginia and North Carolina. We assist clients with business transactions involving multiple states. For matters involving the law of a state where we are not licensed, we associate with appropriately licensed counsel or otherwise proceed only as permitted by applicable law.