Here is the scenario: Buyer is getting financing and has a new survey completed since seller couldn’t produce one. The new survey shows that the screened swimming pool encroaches into the platted drainage and utility easement along the rear property line. As a result, the closing agent sends a survey objection letter to the seller objecting to the pool encroachment. Seller responds, “it wasn’t a problem when we purchased the property a couple of years ago.” That is because the seller did not obtain a survey when he purchased the property, because it was just a platted subdivision lot and he paid cash for the property. Many buyers are under the wrong impression that the expense of a survey is unnecessary where the recorded subdivision plat shows the respective lot dimensions. This can be a costly mistake, as it was here. Because the seller did not obtain a survey when he purchased the property, his title policy contained the following standard survey exception in Schedule B:
“Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land. The term “encroachment” includes the encroachment of existing improvements located on the Land onto adjoining land, and encroachments on the Land of existing improvements located on adjoining land.”
To delete the standard survey exception, the closing agent needs to either be provided a new survey, or seller’s prior survey if no changes have been made to the property and an affidavit signed by the seller that no changes have been made to the property since the date of the survey. Obviously, that did not happen in this scenario.
As a result of the encroachment discovered on the buyer’s survey, the seller had to get the County to vacate the easement as to the pool encroachment, which was time-consuming and costly. Moreover, the standard Cure Period under the FR/BAR Contract is only 30 days unless buyer agrees to extend it for an additional 120 days. Regardless, there are no guarantees that the County will grant the easement vacation.
The moral of the story: just because it is a platted lot does not mean you do not need a survey. You need a surveyor to locate all the existing improvements on the property to determine whether you have any encroachments into easements or violate building set-backs. Further, if you do get a new survey, make sure the closing agent deletes the standard survey exception at closing. Sometimes this gets missed by the closing agent and the policy is issued with the standard survey exception in the owner’s title insurance policy.
As always, if you have any questions concerning the foregoing, we urge you to consult with your real estate attorney.
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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