Behind the scenes while your draw is pending, we look at the numbers every time. We’re obligated to make sure that this project remains in balance – both in terms of the overall sources available to make payments and the payments that still need to be made. Also we have to look at that on a line item by line item basis because if costs run over on one line item and there isn’t a corresponding decreasing cost somewhere else, then we’re out of balance and we don’t see that, if we aren’t tracking it on each line item.
When your draw request is submitted, we will perform a search of the real estate records. This is called a “tract search”. We are generally looking to make sure that no liens have actually been filed against the property by somebody that we do know about or that we don’t know about. Your lender may ask us to notify them if any documents are recorded, including easements, new mortgages, or other matters.
We also check the lien waivers submitted to make sure they match what we expected based on the prior submission and payments made.
Verifying All Information
As we’re going through the materials that you submit with each draw request we’re going to try to verify that we have all of the information that we need. If we find that there are missing items or something that’s just not making sense then we start asking questions. Those questions will be directed to the contractor or to the owner and sometimes to the lender. Once we have everything in good shape and we know it’s good to go we’re ready to ask the lender to fund the draw and pay your bills.
“The Lawyer’s Moment”: Commercial Partners Title is providing this information as a free customer service. We make no representation as to its accuracy as it may pertain to any particular transactions, any one of which may require additional or different documentation. This is not intended to supersede or compromise the terms and conditions of any agreement entered into by Commercial Partners Title, nor any of the parties to a specific transaction. This presentation does not constitute legal advice. We encourage you to obtain advise from appropriate qualified professionals, including an attorney specializing in real estate transactions with respect to any questions you may have with respect to your rights or obligations.