Buyers Know Your Boundaries!

5 SURVEY TIPS FOR YOUR REAL ESTATE TRANSACTION

I have represented too many clients recently who have been involved in a dispute or lawsuit involving their boundary lines because of the property’s legal description.  The underlying scenario is typically one of the following:

• The boundary lines are not where they appear – a fence line or tree line that looks like the boundary line, but is not where the property is actually legally described.
• Encroachments – either you or your neighbor have improvements that are fully or partially on the other’s property.
• The existence or location of an easement that crosses your property.
• The location of utility easements that interferes with the use of your property.

While most boundary issues are curable, they are time consuming, expensive and have lasting implications for the use and enjoyment of your property.   Some could be avoided all together, or addressed as part of the transaction. Here are some tips:

1. Negotiate the inclusion of a survey in the purchase agreement.  Most purchase agreement includes a survey paragraph where the transaction can be contingent upon a satisfactory survey of the property.   The survey can be a boundary survey with stakes that shows the location of the improvements, easements and encroachments.  A properly drafted survey contingency will allow for the correction of an issue before closing, or even allow for the termination of the purchase agreement if the survey results are unacceptable.
2. Make sure the legal description is included in the purchase agreement, or attached to the purchase agreement. Too many purchase agreements identify the property only by its tax identification number or street address.  Worse, some purchase agreements even state “long legal attached” or “long legal at listing office” and it is never attached.   A legal description associated with the tax identification number or street address does not give you an accurate description of the property.
3. Title insurance does not cover survey matters. Most title insurance policies are issued with exceptions.  This means the title insurance company’s coverage does not include problems with legal descriptions, easements, or encroachments that could be identified on a survey.   If a survey is obtained before the close of the transaction, then you may request the title insurance company to remove the survey exceptions.  In other words, if a boundary dispute arises, your title insurance could cover your costs and legal expenses if you had a survey.
4. Read the title commitment. The title commitment identifies recorded easements, private roads, restrictions, and utility easements that affect the property.   Provide the surveyor with copies of these documents so the location can be shown on the survey drawing.
5. Consult with an attorney. If there are title or survey issues that you don’t understand, consult with a real estate attorney to assist.

About the Author:  I am a shareholder and a member of the Management Team for Kreis Enderle.  I have spent 21 years in private practice where I focus on real estate and estate planning issues.  For more information about me or questions about the article, visit email me at: kay.kossen@kreisenderle.com