Real Property Surveys
Importance of Surveys
We recommend every purchaser obtain a survey of the property during the due diligence period. A survey is a map of the property prepared by a registered surveyor after a physical inspection. It will show obvious things like the location of the improvements and the size of the lot and its dimensions. A survey may also reveal issues such as the adjoining owner encroaching on the subject property whether by fence, driveway, shed, or other physical improvement.
Other examples of matters that can be revealed by a survey can include the following:
- Encroachments by Owner
- Encroachments by Others
- Easements benefiting Owner
- Easements benefiting Others
- Easements burdening Owner
- Easements burdening Others
- Boundary Lines
- Setbacks and Violations
- Old Plat References
- New or Modified Plats
- Acreage and Discrepancies
- Current Improvements
- Utilities and Right of Ways
- Drainage Easements
- Road Right of Ways (NCDOT)
- Riparian Rights and Access
The average cost for a survey of residential property is between $650 and $1,300 depending on several variables including the acreage of land, visibility of prior markers, topographic abnormalities, and surrounding development. The attorney conducting the title search does not physically inspect the property, and a third party is often contracted by our office on behalf of a purchaser client. Surveys for commercial properties can exceed $10,000 and take several weeks to complete.
Surveys and Title Insurance
Lending institutions historically required surveys to be completed as a condition to making a loan, but more recently title insurance companies began providing affirmative title coverage for the benefit of the lender without requiring a survey. Because the title insurance company will protect the lender, many banks no longer require a survey for loans up to a particular threshold. Sometimes this causes parties to a transaction to mistakenly believe that a survey is not necessary.
The clarification to the common misunderstanding is that a lender’s title policy will not take exception to matters which may have been revealed by a recent and accurate survey, but the owner will not be protected from those same matters with respect to their coverage. The owner’s and lender’s interests in title coverage may not always align, and survey matters are commonly where that failure to overlap is most commonly found.
Surveys in Commercial Transactions
Whether to obtain a survey in a commercial transaction can often depend on the intended use of the property. If any portion of financing is sought for the development or construction of improvements on the land, a survey or plat will almost certainly be required by the lender. Construction loans require additional coverage in the form of policy endorsements which typically pertain to access, utilities, and rights relating to the use of easements.
In many instances, a surveyor will be required to prepare a subdivision or recombination plat for the purposes of redefining the subject property. A lender’s attorney will commonly require the borrower to obtain a survey which depicts all known matters affecting title as shown in the register of deeds. This is known as an ALTA survey and will customarily complement the schedule of “exceptions” in a title commitment.