Virtually all properties are subject to easements, building setback lines, underground or overhead utility lines, and other restrictive covenants that limit where improvements may be placed on the land. It is important to not only locate the exact location of the improvements on the property, but also the boundary lines, fence lines, driveways, parking spaces, etc. In the late 1990s, title insurers were accepting the use of existing surveys (with a qualifying survey affidavit) on both the acquisition and refinance of loan transactions to provide “survey coverage” on both the owner’s and loan-title policies. In many situations, had a new or updated survey been provided for review and approval at or prior to closing, the buyer/borrower and lender could have identified many potential problems, some examples of which we reference below:
1. Access – Does the property have legal, reasonable or any right of access? Is access clear from the public records? What about physical access? Here are a couple of examples that illustrate this point: (a) The driveway to the property is actually located across the property line on the adjoining property. (b) Is there an easement granting access that was not disclosed on the survey? (c) Access might be through a private roadway, which abuts a public ROW, but who is responsible for the maintenance of the private roadway? (Note also that “physical access” may not necessarily be synonymous with legal or reasonable access in a title policy.)
2. Setback Lines – Are you able to identify the applicable setback lines on the property as set out by the plat or by any restrictions of record? What about any violations of improvements that encroach or protrude onto setback lines? An accurate survey of the property would disclose such matters.
3. Boundary Lines – Property lines and the location of corners are some things people take for granted. Is the property you are buying actually located within the stated boundary lines? Is the property even the same land the buyer thinks they are buying? Sometimes an old legal description can be inaccurate due to an easement or right-of-way that has been granted to another party post-survey and therefore would not be shown on the existing survey. Boundary disputes may arise that give rise to abutters’ rights, which are typically based on “sight” location and current use of the property (which may lead to an adverse possession claim by the adjacent owner). The surveyor is a critical link between the customer’s assessment of the status of title and the actual land the customer believes it is buying.
4. Improvements/Old Improvements – Is there any evidence of recent construction on the property? This might indicate a mechanic’s lien risk that the title insurance company would need additional information from the owner and contractor prior to agreeing to issue any title policies without exception to lien claims. There may also be issues with existing improvements being destroyed, and new improvements cannot be re-built in compliance with current zoning laws (without requiring a variance).
5. Encroachments: By Others/By Owner – Existing encroachments/protrusions of improvements onto the subject or adjoining property may create issues related to demands to remove the improvement causing the encroachment.
6. Easements – If a new or updated survey is not provided for the current transaction, the title insurance company may take exception for any unrecorded easements or encroachments which are identified through other means, such as prior title policies, prior surveys or from information provided by the parties to the subject transaction.
7. Liability – One of the most important reasons to purchase a new or updated survey is that surveys performed for previous owners do not protect new owners. The buyer or new owner will not have any privity of contract with the surveyor for any issue or claims for inaccuracies in an existing survey. The basics of contract laws will normally exclude a third party from liability, as they were not a part of the original transaction. Additionally, the statute of limitations for surveying errors (normally 4-6 years) would even prevent the original client from having any recourse against the surveyor for errors on older surveys.