Surveys
are Important! A
survey is a measured drawing of a tract of land showing the boundaries of the
property and the physical location of all significant improvements and easements
affecting the land. Without a
current survey, prospective property owners really do not have any assurance
that they are getting what they think they are buying.
An accurate survey will reveal setback violations, encroachments of
improvements into easements or across property lines, recorded but undisclosed
easements and the correct location of property lines and improvements.
A survey will reveal whether the main structure is even located on the
lot being sold! There have been
occasions where a house has been built on an adjoining lot, owned by the seller,
next to the one conveyed at closing. These
are just a few of the problems that a survey might reveal.
In
most transactions, the attorney’s title examination will not reveal the kinds
of problems that a survey should disclose. An
attorneys title examination is limited to those matters, affecting title that
are disclosed in the records of the local county courthouse. The majority of
what is shown on the survey is the result of the surveyor’s inspection and
physical measurement of the property and improvements.
As a result, a buyer of property needs a title examination and a survey
in order to be accurately informed of what is actually being purchased.
It
is the general practice in the title insurance industry to give survey
protection in lender’s title insurance policies without requiring a current
survey. The primary reason for their willingness to provide such coverage to
lenders, is that lenders will not normally have a claim against the title policy
until there has been a default in the loan and the survey defect reduced the
foreclosure sales price below the payoff amount. Title insurers have found that
there are no more lender’s policy claims arising due to lack of survey than
due to incorrect surveys. This coverage is not extended to the owner because the
claim for a defect would arise immediately upon issuing the owner’s policy.
This explanation is an over-simplification but it is helpful to understand what
a lender means when they tell a borrower “you don’t need a survey”.
What the lender really means is that the lender will not require the
borrower to get a survey as long as the lender is protected by the title
insurer. |
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