We purchase a policy of title insurance when we purchase real estate to discover title problems and to minimize the risk of incomplete title or loss of title.

There are other legal considerations outside of title insurance coverage, however, about the availability, extent, and quality of those rights that a real estate investor must research in the property’s legal description.

1. Compliance with zoning requirements or appropriate usage of the improvements
2. Compliance with setback requirements
3. The presence of easements or other deed restrictions
4. Satisfaction that all prior year’s property taxes and assessments have been paid
5. Satisfaction that improvements subject to conformation to the appropriate building codes or variances have been approved
6. Satisfaction that the current usage of an improvement is legally conforming and will not be subject to termination by strict code enforcement
7. Examination of leaseholds or other rental agreements, and satisfaction that these contracts do not alter the property value or limit the rights of the new investor
8. Satisfaction that there are no historic preservation or scenic easements that might transfer rights that would otherwise remain in the private sector to the general public
9. Adverse environmental impacts-problems like asbestos, formaldehyde, lead contamination, radon gas, leaky underground storage tanks

A real property’s “bundle of rights”, and how they are used, is what gives rise to the value of an investment property; therefore crucial for real estate investors to carefully examine.

Only then, after examination, can the buyer determine a property’s value and decide whether the real estate investing opportunity is really a package worth the investment.