By: Cameron M. Collins and Patricia E. Nolan
Following years of efforts, the American Land Title Association and the National Society of Professional Surveyors adopted a new 2021 version of the ALTA/NSPS Land Title Survey Minimum Standards. The new standards became effective on February 23, 2021 and, because just about every commercial real estate transaction requires an ALTA survey, this is really important!
ALTA surveys play a critical role in real estate transactions, and most lenders and title insurers actually require them, especially for commercial, industrial, and larger residential properties. At their core, surveys are a tool that help identify potential issues that may affect the value or future use of a particular piece of property. Generally, an ALTA survey identifies property boundaries, easements, encroachments, local zoning information, and flood zone designations, but the final scope of an ALTA survey is actually highly customizable. The Table A Options are the tool provided to customize the scope of a survey, and title insurers and lenders may require that certain Table A Options be included in the final scope of the survey.
Some of the most significant changes to the ALTA/NSPS Land Title Survey Minimum Standards are to the Table A Optional items. Some key updates are as follows:
- Before the updated minimum standards, the Table A Options were pre-defined scopes that could not be changed. However, the instructions now allow for negotiation in wording and fee for any selected item. Because Table A Options can be complex, this change can lead to problems and miscommunications, and even a small change in wording can result in a big effect on scope. To avoid unexpected delays and costs in any transaction, it is good practice to clearly define the scope of the survey before the surveyor completes any field work.
- Table A Option 11 previously established how surveyors were to locate underground utilities, but this Option has now been reduced to only two options that may lead to both increased costs and increased time to complete a survey. Now, if the client wants underground utilities included on the survey, the client can either provide plans (as-builts or other design plans) or ask the surveyor to hire someone to get them. With either option, extra time will likely be required.
- Table A Option 18, which addressed the delineation of wetlands on the subject property, has been deleted. If a lender or title insurer requires a wetlands delineation, this will have to be specifically negotiated with the surveyor.
- As part of a surveyor’s fieldwork, observed evidence of utilities used to be a Table A Option, but this is no longer the case. Instead it is now mandatory to show the observed evidence of utilities on the survey.
In addition to the changes to the Table A Options, there are also several changes to the “minimum” standards for surveys. Some of these key updates are as follows:
- A new requirement provides that, if a surveyor becomes aware of a recorded easement while in the process of preparing the survey, and that easement was not listed in the title report or title commitment for the property, the surveyor is now required to either show or explain the easement on the survey. This can be avoided if the title insurer discovers and provides evidence of a release of such easement to the surveyor.
- A surveyor was previously only required to include the location of utility poles within five feet of each side of the property boundary line. This has been expanded to require a surveyor to now include utility poles on or within ten feet of the property and to note any potential encroachments.
- Tax parcel numbers for non-platted adjoining lands now must be included in the survey.
It is important to familiarize yourself with the updated survey standards to help your transactions run quickly and smoothly. While the revisions have cleared up some issues, they will likely be the cause of new and unforeseen ones. Our Gammage and Burnham attorneys can help you navigate the new survey standards to ensure that your projects stay on target and on schedule.
