UCC Lien Searches and Title Insurance
A UCC lien search is an essential part of the title search process- especially for commercial property closings. UCC lien searches help to determine if a piece of property has any UCC liens against it-- financial obligations secured by creditors that a new owner could be forced to pay.
What Exactly is a UCC Lien?
A UCC lien, also referred to as a UCC filing, a simply an official notice that a lender has a security interest in a particular piece of property. UCC liens usually are filed when a business owner or individual pledges their property by signing a security agreement, allowing their lender to use those assets as collateral.
While some UCC liens are only attached to specific collateral, such as business equipment or vehicles, many UCC liens are blanket liens-- which typically attach themselves to all of a business's property, including real estate. So, if you're purchasing a property, you'll want to make sure there are no blanket UCC liens against it.
Title Insurance and UCC Liens
While a thorough title search is the best way to make sure there are no outstanding liens on a property (or other major title issues), it's also essential to get a high-quality title insurance policy. While some standard policies may not fully cover UCC liens, you may be able to get a title insurance endorsement or an enhanced title insurance policy that does.
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