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Due to Madison Title's extensive experience, the client enjoyed a smooth, obstacle-free closing on two shopping centers in two different states as part of one transaction.
The client, a New York City-based real estate holding company, contacted Madison Title to handle the title and escrow for the purchase of two shopping centers. One property was a Fayetteville, GA shopping center with a purchase price of $19,475,000, and the other property was a Fern Park, FL shopping center with a purchase price of $6,473,000. The multi-state properties were part of one purchase.
The client had applied for a combined double mortgage of $20,700,000, which required the closing of both properties – in two different states -- simultaneously. To ensure a timely closing, every step of the title commitment had to be clarified and confirmed for both properties. The two-state transaction was complicated because title laws and requirements vary by state. In addition, Florida is notorious for its complicated and sometimes challenging title requirements.
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A Multi-State Transaction
Purchase of these properties required a great deal of know-how. The client worked with a single point of contact at Madison in the acquisition of both properties. However, the client also benefited from Madison Title’s deep bench of expertise handling multi-state transactions. Its ability to handle deals in all 50 states was brought to bear in handling of this two-state transaction. The trained title officers at Madison Title inspected the records and documentation on the properties and then worked to resolve the issues affecting title.
Underwriting Requirements
The Florida property was undergoing renovations at the time of the purchase, which impacted the inspections and closing. According to Florida’s construction lien law, a contractor must file a Notice of Commencement when beginning any construction project. This notice offers the Contractor the right to their claim for payment against the property. Since the construction project was still ongoing, the Contractor’s Notice of Commencement would take priority over any mortgage filed at a later date.
In order to guarantee clear title to the property, Madison Title guided the client through the necessary steps. First, the client put a stop to the construction, had the Contractor file a Notice of Termination, and signed an Affidavit that his payments were up-to-date. Once the new mortgage was on record, the Contractor then filed a new Notice of Commencement with the client’s mortgage taking priority.
In this case, the underwriting requirements were extremely difficult to fulfill. However, thanks to Madison Title’s strong relationships with all the major underwriters nationwide, Madison’s title officers were able to identify an underwriter willing to accommodate the special circumstances of this transaction. As an added value, Madison Title’s team also acted as escrow agents, administering third-party disbursements for open balances, including tax payments, water and sewer payments, attorney fees and other charges.
Closing Expertise
As the closing agent, Madison’s team ensured that the documentation for each property was in order, and facilitated the mail away closing, which included tracking the signed documentation, handling all the wires and authorizations and recording the finalized documents. Throughout the process, the client was able to work with a single point of contact to coordinate every detail start to finish.
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