5 Seller Debts Title Searches And Insurance Can Protect You Against

04/21/2026 05:15 AM Mark Goodman

You may pick up the tab on a date or offer to pay for the rehearsal dinner at your son’s wedding, but if you’re like most people, you really don’t enjoy regularly paying for someone else’s expenses. This is especially true when it’s someone you don’t really know. In the world of commercial real estate, it’s possible for a property buyer to have to pay off a number of different debts incurred by the seller because of an oversight as your closing date approaches. In today’s blog, we take a closer look at five types of debt the seller can incur that can become your obligation to pay off if you’re not careful during your commercial transaction.

Don’t Let These Five Debts Become Your Obligation

Here’s a look at some debts a seller may run up prior to the sale of a property that could become your problem if they aren’t rectified prior to closing.

Unpaid Property Taxes - Unpaid property taxes stick with the property, not the owner who failed to pay them, so if you unknowingly purchase a property with outstanding property tax debt, that debt will become your obligation once you become the owner. A title search prior to closing can help identify any outstanding property tax obligations.
Mechanic’s Liens - Perhaps the seller had some improvements made on the property but never paid their contractors. When this happens, the contractor or business may file a mechanic’s lien on the property. Oftentimes this debt will be required to be settled with proceeds from the sale, but only if the mechanic’s lien is discovered prior to closing. Again, a title search will be your best friend when it comes to uncovering a mechanic’s lien on a property.
HOA Fines - If you’re purchasing commercial property that is subject to a Homeowner’s Association, you may find that any outstanding fines from the previous owner will become your obligation if they are not settled prior to closing. Your title services agent will ensure a seller is in good standing with an HOA throughout closing so you don’t inherit any of their fines or debts.
Waste/Sewage Fees - A title search will conduct assessments on the property to learn more about any unpaid fees associated with a property. Properties that have been on the market for a while could have some unpaid municipal fees for garbage, waste or sewage disposal. Odds are these won’t be a huge amount, but you don’t want to inherit these debts either.
Boundary Problems - Finally, a title search or title insurance can help keep you from getting stuck with a bill that is the result of a boundary issue. Perhaps the seller accidentally built a shed or a fence on the neighbor’s property. If this goes undiscovered until you become the owner, that may become your obligation to correct, and it likely won’t be a cheap fix. Clearly determining the boundaries and searching for any possible encroachments or boundary concerns can prevent an unexpected bill once you become the owner.

You want to purchase the property from the seller, but you don’t want to take on their debt and obligations, and you can do this by working with a talented title service team during the due diligence stage of your purchase. We’ve helped countless buyers protect their interests and avoid unwelcome surprises, and we can do the same for you. For more information, reach out to the team at Commercial Partners today at (612) 337-2470.