A property survey is an important piece of the real estate transaction.
When a property is financed, title insurance is ordered to protect the lender against loss resulting from claims by others against your new home. The new homeowner is required by the lender to purchase a policy to protect the lender. When the policy is ordered, the home buyer has the option to purchase a policy to protect themselves as well.
The lender’s policy will include coverage to protect them from claims involving property survey issues.
If the buyer does not have a survey performed prior to closing, the buyer’s policy will not include this coverage. The buyer’s title policy will have what is noted as an “exception” for survey coverage.
A survey is a legal description and drawing of your property.
Surveys identify many characteristics of a property including -
- Boundary lines. The boundary line certification is performed by the surveyor and location of boundary lines and is probably the most common reason a homeowner seeks out a surveyor. The survey is an important piece of information to have before you build a fence, pave a driveway add a garage or pool, or even plant new shrubbery for landscaping. Before you put up the fence, you want to make sure you’re building on your property, not the neighbor’s.
- Encroachments, party walls and joint drives. The surveyor will let you know if there are shared features between parties, can also let you know if features extend over boundary lines.
- Rights of way and easements. Surveys show all of the conditions in your property’s title report as well other agreements, such as access to land or landlocked property easements and agreements.
- Ponds, creeks, streams, rivers & lakes, well and other water features. A survey can identify these features on your property.
- Existing improvements. The surveyor will identify the buildings and other improvements to your property that exist at the time of the survey. This can include the dimensions of frontage, building lines, set-backs, and parking.
- Water, gas, electric, manhole covers and other utility features. Surveyors may report the existence of underground cables as well as information is provided by your utility company. Often utility companies have the right to use a portion of your property for upkeep of utilities. It’s very important for a homeowner to know the exact location of underground utilities before any excavation type of construction.
- Property access. Your survey should state whether there is physical access to the property.
- Zoning. Your survey may state your current zoning classification and description.
If you elect not to have a survey prior to closing, disputes that arise after closing, will not be covered under the homeowner’s title insurance policy.
I encourage clients to get a survey; however, if you are deciding against getting one, I highly suggest you discuss this with your closing attorney before you make a final decision.
If a client elects not to have a survey, he or she should ask the attorney about an “enhanced” or “advantage” title policy.
Here is an example of an Enhanced Policy offered by Chicago Title Insurance Company (one of the nations largest title insurers. Please print it and take it with you to discuss with your attorney.
