Commercial Real Estate in San Antonio, Texas-----"EVERYTHING YOU EVER NEEDED TO KNOW ABOUT SURVEYS" from our KW Commercial SA blog http://kwcommercialsa.com/blog/ under "ask the experts" written under the category of "Doug Becker's Real Estate Law Page" http://kwcommercialsa.com/blog/?category_name=douglas-w-beckers-real-estate-law-blog-page
[Douglas W. Becker at 2011-3-11 in: Doug Becker's Real Estate Law Page
In my practice as a Board Certified real estate lawyer for over 30 years, including 9 years as an Escrow Manager and Underwriting Counsel here at Chicago Title, I have reviewed lots of surveys, some good, some not. Surveyors are just like any other type of professional-some graduated at the top of their class and some were just able to pass the licensing exam-after the 4th try.
Here is what you need to know:
a. Is a survey of some kind always required to get insurable title? No. If neither the buyer nor the buyer's lender require survey coverage, and the property is either a platted lot or the seller is selling the same parcel that he purchased, and a good set of field notes was used in the deed conveying the property into the seller, the title company does not need a new survey to insure title into the buyer. On the other hand, if the seller is selling only a portion of what he owns, such as the sale of a "pad site" that has not yet been platted into an official lot, a new survey or a subdivision plat of the parcel to be sold will be required. Note that I emphasized that the survey is not required, under those circumstances, to insure title. However, if no survey is provided, the buyer will not know whether any portions of any buildings or fences on or adjoining the property encroach over easements, set-back lines or boundaries of the property.
b. If survey coverage is required, an old survey may still be useable, so long as it still accurately depicts the property. The purpose of a survey is to depict the location of improvements and boundaries, and to show whether or not any of the buildings or fences encroach over any lot lines, easements or set-backs. When a title company provides survey coverage, it is essentially insuring that the surveyor has done his work correctly. The coverage costs an extra 15%. In the event the surveyor was wrong, and it turns out that a building or a fence is on a neighbor's property, the title company has to take steps to fix the problem or pay damages. There is no magic cut-off point for when a commercial survey is "too old" to use. The title company will probably require a survey affidavit from the seller to the effect that the survey still accurately depicts the property and that no improvements have been constructed on or around the property since the date it was prepared.
c. What will prevent an older survey from being used? If there have been any subsequent improvements on or next to property, the title company will require an updated survey in order to be able to give survey coverage, since there would otherwise be no way for the title company to determine if the newly built improvements are inside the boundaries and setbacks.
d. Is a plat a survey? No, a plat is a depiction of lot lines prepared by an engineer, and it may reflect the official boundaries of the property on file with the county, but it won't depict the location of improvements. A plat of a lot is generally required to be filed with the city or the county as a condition of subdividing property into pieces smaller than 5 acres. During the platting process, the municipality may require the granting of easements for utilities, drainage and emergency services.
e. If I am not buying survey coverage, do I have to have a boundary survey prepared? If the property to be conveyed is less than the amount owned by the seller, the title company needs a description, called field notes, sufficient to locate the perimeter of the property. A boundary survey that doesn't show the location of any improvements may be used for that purpose, and will cost quite a bit less to prepare.
f. Our survey shows that our fence is two feet onto our neighbor's property. Should we fix the problem by buying the two feet from our neighbor? Fence encroachments are quite common. The better "fix" is to approach the neighbor about the problem, and propose that the parties enter into a boundary agreement, whereby the parties agree that the boundary is the platted lot line on file with the county, and not the fence line. The parties agree that the fence may remain in place, and that the neighbor grants a license to the other neighbor to keep his fence in the encroaching location. In this way, ownership of the strip of land is not lost due to adverse possession, and the neighbor has not illegally subdivided a platted lot. In addition to being an illegal subdivision, a sale of the strip of land out of the lot by the neighbor would require a release of lien from the existing lender, and a sale of the strip of land without the lender's consent might violate the due on sale clause in the neighbor's mortgage, triggering a default.
g. Do I really need to pay for survey coverage if I am just buying raw land with a barbed wire fence around it? In many cases, persons purchasing raw land intend, at some point, to develop or subdivide the property, and the land around the perimeter of the property is generally the most valuable portion. Moreover, when that land is platted, in most cases utilities and roads are laid out in the perimeter areas, meaning that if the surveyor is proven to have made an error in locating the boundaries, critical easements or road frontage could be lost.
h. What are the most common places where errors are made in surveys? When looking at the survey, look carefully at how many times the surveyor shows the notation "set iron pin", as opposed to "found iron pin". When the surveyor can't find a location pin, and sets one, he is making a judgment call as to where he thinks a point should be. Because surveyors are human, and because there is as much art to surveying as there is science (try locating a "large mesquite tree stump marked by pile of rocks" referred to by a prior surveyor 60 years ago), survey coverage becomes more and more important to have.
i. What is an "ALTA" survey and do I have to have one? An ALTA survey is a survey prepared in accordance with the standards published by the American Land Title Association. An ALTA survey includes additional information not required to be included in a standard Texas land title survey, which information can be helpful in conducting due diligence on an improved property, such as zoning information, building height, number of handicapped and non-handicapped parking spaces, required parking ratios per building code, etc. It can be quite a bit more expensive to prepare and is not a requirement to secure survey coverage from a Texas title insurer. It is quite common for lenders to require an ALTA survey on large projects such as shopping centers, apartment complexes and office buildings.
Douglas W. Becker
Commercial Escrow Manager and Underwriting Counsel
Chicago Title Insurance Company
270 N. Loop 1604 E., Suite 115
San Antonio, Tx. 78232
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Commercial Real Estate in San Antonio, Texas
San Antonio, Texas Commercial Real Estate
San Antonio, Texas
Real Estate Law