By: William J. Burke
Time and again, we are engaged to assist clients in solving real estate problems that could have been discovered – and perhaps avoided — if they had surveyed the property before they bought:
- Like the homeowner who discovered a good part of his yard and part of his house were actually outside his lot and within a “paper street” with no known owner.
- Or the buyer who learns that that the hedge and fence that the seller said was the boundary is not, and that the actual boundary is some 30 feet closer to the house, making construction of his addition more difficult or impossible.
- Or the driveway that is really on the neighbor’s property.
- Or the garage constructed by the prior owner violates zoning setback restrictions (will I have to tear it down?).
- Or, my personal favorite: the homeowners who discover that the property described in their deed is actually next door to the house they thought they bought and were in factliving in -– a state of affairs that came to light when “their” home was posted with a foreclosure notice (quite a surprise because they had been paying their mortgage). This was a problem caused by the accidental switching the property descriptions for the adjacent properties prior deeds. It was resolved successfully, but not without a court-ordered reformation of the deeds and mortgages involved.
And the list goes on and on.
Most people would be very surprised how often title disputes and boundary issues arise, and how often they arise in the middle of towns, or in established subdivisions. Claims of “adverse possession” and boundary wars are not by any means confined to the country where boundaries often seem less defined.
And most clients are quite surprised to learn that more often than not, matters such as those described above are NOT covered by title insurance.
More often than not, property owners’ understanding of their precise boundaries and other features of their title is murky at best. Often, owners inherit misunderstandings about their own boundaries, in some cases that have lasted for many years.
In some cases of course encroachments, hedges, fence lines and the like can ultimately create the basis for claiming title by adverse possession (or, as it is sometimes called, “squatter’s rights”), but that entails litigating with one’s neighbor.
Most sophisticated real estate investors and developers obtain a survey as part of normal pre-settlement due diligence (and, increasingly most commercial lenders are requiring a survey). And, those that don’t should.
But what about the purchaser of an existing home or a lot on which to build a home later? In Pennsylvania, it remains the exception rather than the rule that a purchaser of a home or even a lot on which the buyer hopes to construct a home obtains a thorough and current survey. Why? Well, in some cases, there is concern over cost. It is true that a survey is likely to be the single largest pre-settlement “due diligence” expense, and many buyers prefer to allocate their due diligence budget to inspection of the heater and roof and other key building systems.
Also, time is a factor. Everyone in a real estate transaction seems to be in a hurry. And, while most inspections can be done in a couple of weeks, the survey is a longer lead time item.
But most of the time buyers do not get a survey out of sheer ignorance of its importance.
A well prepared survey (done in conjunction with a good title search) will disclose:
- Errors in the property description, or conflicts with the description of adjoining properties
- The location of easements and rights of way that are in the public record
- Setback limitations from property lines and other features, under zoning and private restrictions
- Encroachments (the neighbor’s tool shed built over the boundary line)
- Location of utility lines, wells, septic systems, and other features.
A minor encroachment or boundary closure error is not altogether unusual and is often not cause for alarm. But a significant boundary discrepancy – a fence that the neighbors clearly treated as a boundary but which is significantly off the actual boundary, could be a signal to a significant boundary dispute with a new neighbor.
Perhaps most importantly, it can alert the buyer to obstacles they may confront when they go to build that addition or pool they have in mind, or the home they dream of building on that lot.
The well informed and well advised buyer will not only conduct physical inspections of the buildings, but will review the title search carefully (for easements and restrictions) and should in most cases at least consider a survey.
If you are buying a property with a new home, addition, pool or tennis court in mind, would you buy the property if you cannot actually build?
So, is a survey always required? In my view, it is always prudent to consider a survey in every purchase but is absolutely essential when buying a lot for a new home or when buying a home on which significant improvements are planned (and without which you would not buy, or not buy for that price).
When buying a home in a newer subdivision, may times a recent survey and subdivision plan will be available for inspection, and increasingly municipalities require that lot corners be marked with pins or other monuments. Those circumstances can reduce risks and sometimes provide enough “comfort” to justify not getting a new survey.
At the very least, the decision to get (or not get) a survey should be made after an informed discussion with a competent professional, that takes into account available information from other sources that bear on the decision and risk parameters.
Yes, the survey maybe the most costly single item of due diligence you do. However, it is not nearly as costly as the litigation that can result from title and boundary disputes, the bad feelings with neighbors that title disputes invariably cause, or the inability to build the dream home, the addition or the pool that you hoped for in the first place.
William J. Burke, III
April 21, 2016