Commercial tenants: The overlooked “middle child” of the real estate industry

Jul 30th, 2014 | By Paul Miron

Wedged between the mandated requirements of the lender and the well-protected needs of property owners, lies a grey area — a middle child, if you will. This “middle child” of the title insurance industry represents the tenants renting commercial properties that are often overlooked when discussing asset protection.

Ensure equal “attention” with a leasehold endorsement

A typical commercial title insurance policy is put in place to insure the fee simple interest of the property owner and its lender(s). Although it provides comprehensive protection for most commercial properties, on its own, this type of policy may overlook one important area — that of tenants.

Commercial tenants often sign a lease with a long duration and make costly leasehold improvements. If the landlord’s title is ever called into question or the permitted use (as disclosed to the insurer) under the lease is prevented, the tenant may be exposed to significant risk and potentially devastating losses.

When should a leasehold endorsement be considered?  

The simple answer: always.

Leasehold endorsements provide coverage that is above and beyond the usual coverage in an owner’s and lender’s policy and is available for both a tenant and its lender. Leasehold endorsements come standard with each and every commercial policy issued by FCT.

Not sure if middle-child-syndrome is real?   Tell us your experiences by commenting below and be sure to check back with us next week as we delve into the anecdotal evidence.




Subject to certain exceptions, commercial title insurance policies equal or below $10M CAD are provided by FCT Insurance Company Ltd. Commercial title insurance policies above $10M CAD are provided by First American Title Insurance Company. Reference should be made to policy documents to confirm the insurer on any individual transaction. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.


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