After acquiring a commercial parcel through foreclosure or auction, several critical steps must be taken to clear the title and obtain legal possession. These actions help secure ownership rights, eliminate legal risk, and prepare the property for resale, development, or financing. Because foreclosure sales often involve limited disclosures and unresolved encumbrances, prompt post-acquisition follow-up is essential.
1. Record the Transfer Deed
- Ensure the trustee’s deed, sheriff’s deed, or certificate of sale is recorded with the local county recorder.
- Recording establishes legal ownership and priority in public records.
- Delays in recording can complicate title claims or insurance issuance.
- Verify deed accuracy, legal description, and grantor-grantee details.
- Request certified copies for lender, insurance, or permit applications.
2. Order a Title Search or Title Insurance Policy
- Conduct a full title search to identify surviving liens, easements, or claims.
- Apply for owner’s title insurance if available post-sale; some properties require a quiet title action first.
- Address any clouds on the title, such as unrecorded deeds, unreleased mortgages, or legal disputes.
- Work with a title company or real estate attorney to confirm insurability.
- Title clearance is required before refinancing, selling, or building.
3. Begin Eviction or Possession Proceedings (if occupied)
- If previous owners or tenants remain, file for lawful eviction or possession through the courts.
- Non-judicial buyers may require a formal unlawful detainer action to regain access.
- Some states require post-sale notices before initiating eviction.
- Hire legal counsel to handle notices and court filings properly.
- Do not attempt self-help evictions, which may violate local law.
4. Secure and Inspect the Property
- Change locks, fence the site, or post signage to prevent trespass and illegal dumping.
- Conduct a thorough inspection for safety hazards, contamination, or code violations.
- Document the condition with photos and reports for insurance and legal purposes.
- Notify utility companies to restore or transfer service under the new owner.
- Assess any needed repairs, cleanup, or compliance corrections.
5. Address Remaining Liens and Obligations
- Pay outstanding property taxes, HOA dues, or municipal assessments that survived the sale.
- Clear any special improvement district (SID) charges or utility liens.
- Resolve mechanics’ liens or judgment liens through negotiation or legal action.
- Obtain lien releases or satisfaction documents for cleared obligations.
- Keep records of all resolutions for the title and future buyers.
