This is the next and final article in our series on high-stakes real estate transactions in Oklahoma. In the last post, we discussed some high-ticket expenses that could be lurking in your real estate deal. This blog focuses on commonly occurring title problems specific to multi-parcel, high-value commercial real estate projects.
If you are an Oklahoma developer, this article is for you. As a real estate attorney, I can tell you one thing: titles almost never tell the whole story. Every seasoned developer knows that multi-parcel deals may appear to be like any other deal on paper, but each parcel brings its own unique history, quirks, and potential headaches. Whether you are in the process of document review, negotiation, due diligence, Environmental Site Assessment (Phase I or Phase II), the final stages of closing, or ready to escalate the matter to court, Niroula Law is here to help. Reach out to us online or via telephone to schedule a consultation with an Oklahoma high-value real estate attorney at an OKC real estate law firm.
Why are multi-parcel properties so complex?
What makes multi-parcel developments so complex? The answer is actually pretty straightforward.
First, each parcel is its own unit, which means it has its own chain of title. From the outset, you are responsible for a thorough review of each of these chains. More chains, more risks.
Second, each parcel may have its own easements and restrictions. I like to refer to this as “Layered Easements and Restrictions.” These can include utility easements, old oil and gas leases, or subdivision CCRs (conditions, covenants, and restrictions), and often, they don’t align neatly across parcels.
Third, each parcel comes with its own survey and legal description. Misaligned boundaries, outdated metes-and-bounds descriptions, or overlapping tracts can create unexpected issues at closing.
As a result, when you combine several parcels into a single project, you are stacking risk. Each lot’s separate chain of title, conflicting covenants, survey errors, or outdated legal descriptions can hold up your closing faster than you might expect. The simple takeaway: you need to understand how the parcels interact before you write that check.
What are the most common title issues that cause real problems?
There are a multitude of title issues that may come up during the closing of a large project. I have compiled a list of some common title issues that developers often face.
#1. Utility and Access Easements:
Utility and access easements are often the first trap I see in multi-parcel deals. A relatively minor utility easement might run straight through the footprint of a planned building or parking lot. Some developers have to redesign entire site plans because a buried water line or an old utility corridor wasn’t properly identified during the title review.
#2. Old Liens and Mortgages:
Old liens and mortgages can also catch a seasoned developer off guard. Just because the seller says the property is “clear” doesn’t mean the land records agree. It’s not uncommon for a lien from a previous construction loan, recorded decades ago, to pop up weeks before closing because it was never released. This alone can cause last-minute payoffs or lender holdbacks, further delaying the closing.
#3. Restrictive Covenants:
Restrictive covenants are another frequent headache. Usually, the CCRs (covenants, conditions, and restrictions) written 30 or 40 years ago often clash with modern development plans. Imagine you have a plan to build a mixed-use development across three parcels, only to discover that one lot was subject to a covenant limiting building height and commercial use. Resolving it may require negotiations with the neighborhood association, which takes months, eventually delaying the project and funding timeline.
#4. Mineral Rights Issues:
Then there are mineral rights severed decades ago. In Oklahoma, this is a real concern. Even if you only intend to use the surface for your project, an active oil and gas lease can grant a third party a multitude of rights. These rights can affect your construction, require access for drilling, or impose additional safety requirements. There are instances where drilling operations forced temporary shutdowns of surface development. Those disruptions can end up costing millions in lost revenue and added construction expenses.
Issues like these underscore why a title review cannot be cursory. Make sure that you carefully check for easements, liens, covenants, and severed rights. Even an unsuspecting issue can delay closing, cause financing issues, or bleed millions from your project’s bottom line.
Timing and hidden problems
The age old maxim, it’s not done until it’s done couldn’t be more true in the case of large real estate deals. The funny thing about it all is that the toughest issues often don’t show themselves until late in the game. You may think everything is clear, only to find a last-minute judgment lien or a neighbor suddenly disputing a boundary line.
Even after the deal closes, problems can pop up. A mis-indexed deed, an unexpected encroachment, or a claim no one saw coming can appear months later. Naturally, it causes headaches for both developers and lenders. These last-minute, sneaky issues can stop construction in its tracks or tie up funding, and that is the last thing any developer wants.
The main takeaway is this: the less time you have, the more cautious you need to be. I understand the pressure to move deals quickly, especially when deadlines loom. While trying to keep lenders and investors happy, it’s all too easy to overlook critical details. Be mindful of these sneaky issues while working on a short deadline.
Lender and investor considerations
Title issues don’t just affect the property itself. They filter through every corner of a high-stakes deal. Lenders naturally pay close attention to title, as it directly impacts the value of their collateral. A hidden lien, easement, or boundary issue can make a property less secure as a loan asset, prompting lenders to be more cautious, impose stricter terms, or even pull financing.
Title defects are equally problematic. If a closing is held up or a parcel’s use is restricted unexpectedly, lenders may raise concerns, place conditions on the loan, or withhold funds until the issues are resolved.
On the same token, you also have to keep the investors on board. They notice these issues immediately. If a title or other types of problems cause a delay, their confidence can waver. A minor snag can quickly snowball into a much larger problem. Even worse, investors may pressure you to fix the issue quickly, which often leads to rushed decisions that cost time, money, or both.
Make sure you understand the investor and lender dynamics. Pay attention to their interests so that if an issue arises, you can assess how it affects them. This allows you to plan a potential resolution before the problem gets out of hand. Communication is key. Be forthright and keep both investors and lenders informed if you see issues on the horizon. That way, you have enough time to resolve them without jeopardizing the project.
Practical advice from an Oklahoma Real Estate Attorney
The most important rule I share with developers is never to skim the title stage. Read every exception and study it against surveys. Verify taxes, liens, and mineral rights. Confirm that easements and covenants don’t conflict with your development plans and business operations. Retain an experienced attorney early to spot the issues most likely to cause delays or cost money. Lastly, the time you spend on this due diligence is nothing compared to the cost of fixing a problem after closing.
Oklahoma City Attorney for High-Value Real Estate Development
When you’re dealing with high-value developments in Oklahoma City, even minor title problems can snowball into costly headaches. The best way to protect your project, your financing, and your investor relationships is to catch and resolve issues early. As a real estate development attorney in OKC, I help developers navigate these challenges so they can keep their projects moving forward with confidence. If you’re planning or managing a large-scale development, now is the time to make sure your legal foundation is as solid as the one you’re building on. Contact us online or by telephone to schedule a consultation.
