What would you say if you went to a doctor with a report that went something like… “Doctor, I woke up this morning sweating and with chest pains. Do you think I should come in?” And having the doctor respond, “Do you realize that only 1 in 10 people who have chest pains actually have some kind of heart event going on? Unless you have really good health insurance, if the chest pains have gone away, I wouldn’t worry about it.” Fortunately, I don’t know much about heart events, but I do know that I’m getting another opinion. I may want this guy with me in Biloxi, but I want another doctor.
People ask me, and they ask realtors constantly, whether or not they need a survey when they buy property. The answer could never be “No” for anyone who understands the consequences of the wrong answer. I know a survey slows the process down, and it may be expensive. I also know a survey may reveal boundary line issues that make closing difficult or impossible. But if a survey makes closing impossible because of what it discloses, think of the expense and trouble if a problem that would have been easily disclosed is only discovered after closing. The realtor, lawyer, or anyone else who is paid to know, will have his own neck on the block if he gave the advice not to bother with a survey.
Understand please what a survey is intended to do. I reviewed a closing last week in which a very expensive acre of property had been bought in a city, supposedly at a highway intersection. Someone permitted closing to occur before a survey was ordered. After the survey was obtained, it became clear that someone else owned all of the property that surrounded this 1 acre tract. Not one side of the property touched on a legal right of way. Everyone wants to get into the title insurance business, and some company wrote a policy insuring this acre. The closing agent and realtor both got their commissions and the closing happened timely. Now someone has to deal with the mess. It is not unrealistic to believe that the title company, the real estate broker, the mortgage company, and all of the parties, will pay a lot more money in lawsuits to straighten this out than they made on the deal. Being sloppy is not worth the cost.
There are 2 kinds of information shown on an ALTA (American Land Title Association) a survey. The first is anything contained in the public records. The boundary lines, surely. But also anything else documented, even if never built or used. A gas or power line easement, or access way deeded but not built, must be shown. That’s the only way you will know it exists. Contiguity with streets and other lots will be shown. In addition, any improvement or use which is apparent from a view of the property must be shown on a survey. If the neighbor has been using the property as his access, for example, or for his tin shed or fence, this will all be shown on a proper survey, even if the use was never documented.
I have suggested that there are 2 rules for ordering a survey. The first is to never tell someone they don’t need a survey. That is a decision a Buyer should make after knowing the risks. For instance, if there is an existing survey, and if the property is a residential lot on which no changes have been made since the date of a prior survey, and if one having that survey in hand goes to the lot to verify its information, a survey can be waived, but only if the mortgage or banking regulations of the mortgagee permit that. Normally banking regulations will not permit that exception to apply to commercial property.
The second rule when you order a survey, is don’t call the surveyor. Call first the title company. Tell the title company to do a search of all public records that have anything to do with this property. Then have the title company send its title work to the surveyor to plot everything shown on the public records before he ever visits the property. Only then do you get the full benefit of your survey and only by doing that will you have an ALTA qualified survey. The title work available to the surveyor will be identified on the face of an ALTA survey.
Be the experienced, careful professional in the deal. Make sure a complete copy of the title work is given to the surveyor before he begins work. The title commitment must be identified on the face of an ATLA survey.
Next month’s article will be written by Caryn Campbell, an employment law attorney in our Shalimar office. The article responds to an experience I had in a local mullet restaurant (an important, national resource) last week. An old guy (about my age), walked in, during the rain, putting his Cadillac keys in his pocket. He sat down in the booth across from me and announced that his dog was a service dog and he had a right to bring his dog (wet) into the restaurant, and sit him down in the aisle beside me while I ate fried mullet. I said nothing, but when the owner said no, the dog owner called the Sheriff. The Deputy was very polite, but visibly confused. He didn’t understand either why this guy would drive up and insist that he had a right to bring his dog (or presumably some other animal) in for lunch.