Chicago Title NCS Chicago: SYFCREC 2021

Surviving Your First Commercial Real Estate Closing I Mechanic’s Lien Risks & Construction Escrow Disbursement Provisions Under the Escrow o Funds are not released from escrow until the Title Company is able to issue its endorsement. o The Title Company may stop disbursing under the following circumstances: o New exception to title o Misstatement or discrepancy in the documentation o Title Company is permitted to verify information provided by the Borrower or Contractor at each draw o Title Company is authorized to make partial disbursements, in its discretion, if sufficient funds have been received, and the Title Company is able to issue the endorsement to the Lender o Title Company may agree to accept nonconforming documentation for any draw, if it is prepared to issue the endorsement, but reserves the right to require full compliance with the escrow requirements in future draws 21 Surviving Your First Commercial Real Estate Closing I Mechanic’s Lien Risks & Construction Escrow Issues Outside the Construction Loan Agreement o Title Company owes no duty to third-party beneficiaries to the escrow o Title Company does not insure: o The building will be completed o The building will be completed in accordance with plans and specifications o Sufficiency of funds o No liability for representations made by the Architect / Inspector 22 21 22 84