When purchasing assets, title due diligence is crucial to protecting your new investment. Before signing on the dotted line, you’ll need to verify ownership of the assets and uncover any potential defects that could threaten your interests. This process is often complicated by data rooms overloaded with massive amounts of material you must sift through and vet in a limited time before closing. However, you can address the highest risks by prioritizing the following tasks.

First, you should determine what, if any, title opinion coverage of the potential assets has already been established. The data provided by the seller should include any previously obtained title opinions. A comprehensive review should be conducted to identify any gaps in land or periods affecting the assets. Next, you’ll want to promptly engage a title firm and broker to get updates on title history. The broker will thoroughly research the ownership history of the assets in the public records, all of which will then be examined by a title attorney to identify current ownership and any potential defects. The key is to identify your needs as early as possible, as title updates, especially for interests with complicated histories, can be a time-consuming process. Not only do you need to be fully apprised of any potential complications with your purchasing interests, but any serious defects will require time and expertise to be satisfactorily treated before closing on the acquisition. The most time and cost-effective strategy is to identify the most crucial and highest value assets and prioritize any associated defects accordingly. If necessary, the most crucial defects can be identified and curative initiated, even if the drafting of a full title opinion will require additional time.

Thorough title due diligence is a crucial but effective safeguard for your potential investment. Determining coverage early and prioritizing wisely can most effectively protect your purchase. RR&A is home to an experienced oil and gas title team. Contact us today for assistance with your next due diligence project!