Land surveys are a vital part of real estate due diligence. Lenders and financial institutions do not always require that a survey be prepared in connection with a closing[i], so it is an important consideration for any buyer of real estate.
Land surveys can identify common issues such as:
- Homes built over lot lines or in the wrong lot entirely
- Fences or retaining walls not being built on lot lines, creating situations where ownership may be challenged or fences or walls may have to be removed
- Driveways that are not entirely within the property, causing issues if driveway location or “sharing” rights are contested
- Homes, swimming pools or other improvements being built on top of a utility easement, meaning the utility company may have the right to ask you to remove an improvement or dig under your house
- Potential easements in rural or suburban areas, often taking the form of access paths that can establish a property right that may encumber your own property.
Investing in a survey gives you and your real estate professional the information needed to take action and address any issues or even break contract. Choosing the right survey will also determine whether or not you get “survey coverage” on your owner’s title insurance policy – which can protect you in the event of a boundary dispute or any of the issues noted above.
Below are the common types of surveys you’ll encounter.
1. Surveyor’s Real Property Report (also commonly known as a “Spot Survey”)
General Price Range: $150-200
A Surveyor’s Real Property Report (“SRPR”) or “Spot Survey” is not actually a survey in the true sense. It’s a drawing of a piece of property showing the lot lines and the approximate location of any improvements. SRPRs allow for a large margin of error, generally +/-1 foot. This is because the surveyor does not go out and physically locate the property corners denoted by a physical marker, but rather use the recorded plat of the subdivision as a reference.
Because of the high margin of error, title companies are not generally willing to give survey coverage on the final title policy based on a SRPR alone. Too often these reports potentially disclose an issue that doesn’t actually exist, or miss something important because of how the lot lines are defined.
SRPRs can only be used in recorded subdivision plats, and not, for example, on acres of raw farmland.
In our opinion, SRPRs are good for a “quick look” at a property. They may also be a viable choice for urban properties where the structures have existed for decades, and as a result, there’s little risk that any issues will be challenged.
2. Boundary Survey
General Price Range: $450-750
A Boundary Survey is the minimum we – and most all title companies – require to extend survey coverage on the owner’s final title policy. Because the surveyor physically locates the property corners, boundary surveys have a very low margin of error: <0.1ft (or just over an inch). Boundary surveys feature great detail; include the lot lines, the improvements, any overhangs and encroachments, easements and setbacks, and any other other things that may restrict how the property can be used.
Because they are accurate and detailed, boundary surveys will disclose any major defect regarding lot lines and the location of improvements (including fences, driveways, retaining walls, etc.), can be a valuable tool for creating a path towards resolution.
The standard residential sale contract contains language allowing the buyer can object to issues that arise from the title commitment or the survey. While a SRPR’s large margins of error create grounds to contest a survey objection, the accuracy of a Boundary Survey is not likely to be contested, and gives a buyer the justification to request that the survey-related issues be addressed, or to break contract.
3. ALTA/ACSM (Commercial) Survey
General Price Range: $2,500 and up
Less relevant to residential buyers is the ALTA/ACSM survey, a type of specialized survey created jointly between the American Land Title Association and the American Congress on Surveying and Mapping.
Used for commercial purchases or high dollar value residential purchases, the ALTA/ACSM survey provides a highly detailed report that includes the property boundary lines, improvements, elevation of the property, the location of underground utilities, zoning classifications, flood zone classifications, access and legal routes to the property, and evidence of use by other parties. An ALTA/ACSM survey combines a field investigation with public records to obtain as much information about the property as possible.
Information is Leverage
At Leaders Title we recommend that residential buyers invest in a Boundary Survey in most cases. Having the right information about a prospective property not only gives you valuable information when determining whether to proceed to closing, it will come in handy when the property is eventually re-sold. The owner will already be aware of any potential issues a subsequent buyer will raise prior to listing, and can adequately address them before they arise.
For more information about what type of property survey is most appropriate for your purchase and the related title requirements, contact the team at Leaders Title!
Disclaimer: information contained in this article does not constitute legal advice, and should not be taken as such.
[i] Lenders receive automatic survey coverage on most loan policies of title insurance. Generally, if the loan amount is less than $5,000,000, the owner provides a final owner’s affidavit at closing attesting that there are no boundary/survey related issues, and there are no unusual issues with the property and/or legal description, survey coverage will be given. In unusual circumstances or high-dollar loan amounts, boundary surveys or ALTA surveys may be required.
