Title Insurance 101- What is an ALTA/ACSM Survey?

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When buying or financing real property, the lender or purchaser will want information regarding the existence and location of improvements that may be on the property.

This is because, while a title search will tell you who has rights in and on the property, it does not show the physical condition of the land. Sometimes all that is required is a simple physical inspection, where someone takes a look at the land to determine what is on it, such as buildings, driveways, fences, etc. But a physical inspection will not show the location of buried power or sewer lines, nor will it be able to accurately tell you whether the fence is built on the property line or several feet over. A title search may reveal an easement running across the land, but without an on-site survey that plots out the exact location of the easement, no one can tell how or whether a building on the land affects that easement. When that degree of specificity is required, you want an ALTA/ACSM Survey.

The “ALTA” stands for the American Land Title Association. The” ACSM” stands for the American Congress on Surveying and Mapping. These two organizations have adopted minimum standards for the preparation and completion of land title surveys, the most current version of which was adopted in 2011. The ALTS/ACSM survey standards address such issues as unrecorded easements, possessory evidence and encroachments. The standards not only meet the concerns of the title insurance company, but also guide the surveyor in the preparation of the survey, leaving virtually no issues of interpretation unaddressed. An ALTA/ACSM survey is the “gold standard” of surveys, and generally satisfies the requirements set by the title companies in order to remove the general exceptions in Schedule B of the policy regarding survey and possession issues.

The ALTA/ACSM survey will set forth a legal description based on the surveyor's notes. The surveyor will have gone onto the land, and with digital and/or laser measuring instruments, measured the boundaries of the property, taking into account any boundary markers already in place. The notes from those measurements will be used to create a boundary description of the land, using a metes and bounds description. The surveyor will compare his notes to the legal description provided by the title company or seller's counsel, and where there are variations or encroachments, will indicate them on the survey.

ALTA/ACSM standards require that the surveyor show all buildings on the land, as well as the distances between the buildings located on the property and the boundary line. If requested, the surveyor will indicate what types of improvements are located on the property, i.e., single story commercial building, or two-story multi-family residential. This will enable counsel to start the process of determining if the property complies with existing zoning requirements.

The survey will indicate the location of any encroachments or protrusions of any buildings on the property onto any easements, over any building set-back lines, or over the boundary lines. It will also show the existence of any protrusions of buildings located on adjacent property onto the subject property. These types of encroachments may interfere with the owner's ability to use the improvements, as in the case of an owner of an easement requiring removal of the encroachment. Encroachments can also indicate the potential for litigation over the exact location of the lines involved.

The survey will show any easements that are visible on the ground. If the title company provides the surveyor with copies of easements, the surveyor will locate those and show them on the survey, whether or not they are visible on the land. Where the land is part of a recorded subdivision, the surveyor will review the recorded plat and locate easements that are shown on the plat. In the event of physical evidence of any use of the property as an easement or right of way that is not evidenced in any recorded documents, the surveyor will show these as well. Visible power or telephone lines that appear to service the property are generally not considered easements but service lines, and will be shown on the survey. However, if the surveyor finds an easement or use of the property that is inconsistent with the expected use by the landowner, such as a fence belonging to a neighboring landowner which is encroaching onto the subject land, or evidence of common use of the rear of the land as an alley, the purchaser will want to investigate these findings to determine if there is a possible risk of loss through adverse possession.

The ALTA/ACSM survey will show access to streets, roads, curb cuts, and set-back lines. It will indicate the known width of rights of ways, and will name adjacent streets. If the property is a shopping center or office building, the surveyor can also indicate the number of parking spaces that are on the land, including any handicapped spaces.

Where the land is vacant, a surveyor may be asked to provide topographical information in order to determine the viability of the land for a building or road.

All of this information is especially important when purchasing or lending on commercial property. Commercial lenders will almost always require an ALTA/ACSM survey on the property subject to the loan, as they will be unable to sell the loan on the secondary market without one. Even if your lender does not require an ALTA/ACSM standard survey, it is always a good idea to obtain one to make sure you know just what kind of physical issues affect the land. There are too many things that can be missed when an inferior survey is used.

A copy of the ALTA/ACSM survey standards can be found at the ACSM website, http://www.acsm.net/_data/global/images/PDF%20Documents/ACSM/20110223ALTAACSMLandTitleSurveyStandard2011.pdf

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