What is ALTA/NSPS Land Title Survey?
This section helps to explain the purpose and intent of an ALTA/NSPS Land Title Survey, who relies upon and benefits from it, and what information is needed by the surveyor to submit a proposal and then to perform the survey.
The American Land Title Association (ALTA) and the National Society of Professional Surveyors (NSPS)–the legal successor to The American Congress on Surveying and Mapping (ACSM)–represent the title insurance industry and the land surveying industry respectively. In 1962, these two entities came together for the first time to develop a survey product that would meet the needs of the title insurer to delete the standard survey exceptions from the issuance of their title policy. The product that was developed was titled an ALTA/ACSM Land Title Survey, now referred to as an ALTA/NSPS Land Title Survey, and the land surveyor’s responsibilities were outlined in the “Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys”. Since 1962, the requirements have been revised approximately ten times to the most current requirements that went into effect on February 23, 2016, and are cited in this Handbook. Within a commercial real estate transaction there are many parties involved who have varied interests in the property and are looking to the survey for relevant information. Although the main purpose of the survey is to delete the survey exceptions, the information reported on the survey provides benefit to all parties and can answer numerous questions or concerns. The comprehensive survey reports relevant information about the property that include but are not limited to (1) the surveyor’s findings about the property boundaries, (2) any observed easement evidence together with easements and exceptions to coverage cited in the title commitment and, (3) the improvements, utilities, public access, and significant observations such as encroachments. Furthermore, if negotiated with the surveyor through Optional Table A Items, the survey can reveal specific information about the property relating to zoning, flood hazard concerns, topography, parking configurations, wetlands, etc.
The lender and buyer are concerned with the present and future use of the land and all restrictions and encumbrances that may affect the property. The information revealed on the ALTA/NSPS Land Title Survey helps the lender and/or buyer and their counsel evaluate any potential risk and realize the benefits of owning or mortgaging the property. The title insurer is asked by the lender and/or buyer to provide insurance against potential use losses or claims against the land that may arise after the purchase of the property. Such insurance includes protection for the lender or buyer against (1) boundary line conflicts with adjoining properties, (2) encroachments onto and from adjoining properties, (3) rights of parties to the property usually in the form of easements, leases, or other encumbrances, (4) the contiguity, or lack thereof, of multiple parcels that combine to form the property, (5) access to public highways, and (6) matters on the property that may affect zoning issues or compliance. In the issuance of their policy, the insurer uses the survey to assess the risks and to determine what exceptions from coverage must be included. Prior to the issuance of a title insurance policy, the title company usually provides a title commitment or preliminary title report that cites the property to be insured and the exceptions to coverage based upon an abstract of the public records and other known documents. One standard exception to coverage usually includes matters that would be disclosed on an accurate survey. The ALTA/NSPS Land Title Survey is used and relied upon by the insurer to remove and sometimes add exceptions to their insurance coverage offered to the lender or buyer based upon the surveyor’s findings.
The seller of a property also uses and relies upon the ALTA/NSPS Land Title Survey as protection against any potential claims from the lender or buyer after conveyance. The survey provides the seller a level of comfort that at the time of transfer all improvements are located within property boundaries, others do not have rights to the property other than those disclosed in the form of easements, leases, or other encumbrances, no boundary line conflicts exist with adjoining owners, and reports the relevant information pertaining to zoning compliance issues. Considering there are multiple parties in a typical real estate transaction who look to the ALTA/NSPS Land Title Survey for information, the surveyor is assigned a complex set of responsibilities. To compound this, the buyer, seller, and lender frequently engage counsel to represent their interests. Even though one party in the transaction is responsible for engaging the surveyor and paying for the survey, the surveyor’s obligations are extended to others. It is most beneficial that survey matters and needs are discussed among transaction parties before a surveyor is engaged to alleviate any confusion in requirements, timing, responsibilities or direction.
The ALTA/NSPS Land Title Survey is based upon a current title commitment or preliminary title report for the property as prepared by the insurer. The limits of the property to be surveyed and insured are contained within the Schedule A that should cite the description of the property as it appears of record. Also included in the Schedule A are any appurtenant rights that provide a benefit to the property such as easements or agreements. Per the Minimum Standards, the surveyor must review the record description, report it on the face of the survey and report any boundary discrepancies or conflicts such as gaps or overlaps based upon field evidence and mathematical closure principles. Occasionally, in addition to reporting the record description, a surveyor at their discretion may also report an “As Surveyed” or “Field” or “Measured” description based on their findings, observations, calculations and opinion. The Minimum Standards now require the surveyor to provide a correlation of this new description to the record description and also to provide an explanation as to why it was prepared. The title commitment also provides a listing of abstracted exceptions under the section titled Schedule B-II Exceptions. The title company then looks to the surveyor to verify whether these exception items are located on the property. Based upon the surveyor’s findings, the title company will determine whether an exception item has an affect on the property and if not, they may decide to delete the exception from the issuance of their title policy. These exceptions include but are not limited to easements, covenants, and restrictions which may burden the property. With the adoption of the 2016 Standards, Section 6.C requires that the surveyor must also provide a Summary of Easements in notation form on the survey stating whether an easement is located on the property or not, is plotted, or if not plotted, then why. The Schedule B-II Exceptions may also cite information previously revealed by others either by reference to a prior survey or by recorded documents that may display a use of the property by an adjoining property. As all of these matters are vital to the completion of the survey, it is imperative that a current title commitment for the property and copies of all the supportive documents 5 referenced within the Schedule B-II Exceptions be made available to the surveyor as soon as possible. Without a commitment the surveyor may be assuming the limits of the property to be surveyed, which may include more or less lands than actually required or ultimately contained within the Schedule A. Furthermore, without a commitment containing exceptions that would list easements, etc., the surveyor may note many uses of the subject property that are in actuality permitted uses based upon recorded agreements.