Escrow & Title
What is a 'gap indemnity' in a Delaware commercial real estate closing?
AInsurance covering the gap between the purchase price and the appraised value
BA written agreement protecting the title insurer for any liens or interests arising in the 'gap period' between title search and recording✓ Correct
CIndemnification by the seller for undisclosed defects discovered after closing
DA credit from the seller to the buyer for deferred maintenance
Explanation
A gap indemnity is an agreement (often from the seller or a title company) to indemnify the title insurer for any interests arising in the gap period between the date of the final title search and the recording of the new deed.
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Key Terms to Know
Deed
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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