Why have an ALTA/ACSM Land Title Survey? Northeast Indiana Commercial Brokers Presentation May 14, 2008

Transcription

1 Why have an ALTA/ACSM Land Title Survey? Northeast Indiana Commercial Brokers Presentation May 14, 2008

2 , Inc. Normal Participants in Process Lender Lender s Counsel - Typically has most requests & clout Title Company Negotiates exceptions, base policy coverage, & endorsements. Provides record documents to attorneys & surveyor Buyer Buyer s Counsel - Protects client s interests Buyer s Realtor - Often keeps the process moving Buyer s Surveyor - Very rare Seller Seller s Counsel - Protects client s interests Seller s Realtor - Often keeps the process moving Seller s Surveyor - Provides survey acceptable to all parties while keeping fees at a minimum

3 , Inc. Type of Surveys in Indiana Types identified in 865 IAC Original Surveys (can also be an ALTA) 2. Retracement Surveys (can also be an ALTA) 3. Route Surveys 4. Surveyor Location Reports

4 DIGEST, Inc. volume 6, issue 5 may, 2007 HOW MUCH DO YOU CHARGE FOR A BOUNDARY SURVEY? Survey. Unlike a Retracement Survey, an Original Survey creates a new parcel of ground out of one or more older deeds. Subdivision Plats (creating one or more lots ) are typical examples of an Original Survey, but acreage in Rural areas that is split off the farm also qualify. ROUTE SURVEYS Route Surveys are typically completed to provide for property transfers and easements necessary for: Highways, Railroads, Waterways, Pipelines, Electrical Lines, or any other linear transportation or utility route. That may sound complicated, but the basic idea is to provide one survey document that ties several land transactions together when multiple properties and property owners are involved. ALTA/ACSM SURVEYS Winning the contest for the most acronyms in the title, ALTA/ACSM Surveys are high-performance surveys typically generated for commercial and/or industrial properties. To clear things up a little- ALTA stands for American Land Title Association and ACSM stands for American Congress on Surveying and Mapping. The basic idea behind these specialty surveys is that the Title Insurance companies can provide better Title Insurance coverage with a more detailed survey. The Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys (another great read) published every few years (the last time in 2005) provides the rules for completing these surveys to certain specifications. When all the specifications are met, the lenders involved in these high-dollar deals are a little more comfortable with the property because the Title Insurance companies provide more complete coverage for the property. SURVEYOR LOCATION REPORTS Surveyor location reports win the contest for the least liability for the surveyor. They are restricted by State Law to be used only on properties less than 2 Acres which already have a house (1-4 Families) on it. Additionally, the Surveyor must state in his certification that, This report is designed for use by a title insurance company with residential loan policies. No corner markers were set and the location data herein is based on limited accuracy measurements. Therefore, no liability will be assumed for any use of the data for construction of new improvements or fences.,ogo? A I get multiple phone calls every week asking that question. While it may seem like a reasonable question to most people, it actually is quite complicated and requires a substantial amount of information to answer. Rather than spend this month talking about the details that have to be determined in order to develop a Boundary Survey, we are going to spend some time with the Indiana State legislation that defines Surveys. We will discuss the different types of Surveys, their different purposes, and requirements to meet the Standards for those Survey types. When you finish reading this newsletter, you will be an expert among your peers in matters related to Boundary Surveys. BOUNDARY SURVEY TYPES Did you know that the piece(s) of paper that is commonly referred to as a Survey or Boundary Survey could actually be one of about five distinctly different types Surveys? In fact, one of the Surveys typically produced for Property Transactions is not a Boundary Survey at all. Survey types and descriptions can be found in: 865 Indiana Administrative Code (IAC) through 865 IAC Those sections of Indiana Code are the source for this newsletter (and a pretty good cure for insomnia.) There are essentially five different types of Surveys commonly referred to as Boundary Surveys. Those types are: Retracement Surveys, Original Surveys, Route Surveys, ALTA/ACSM Surveys, and Surveyor Location Reports. RETRACEMENT SURVEYS This is probably the most common type of actual Boundary Survey. The basic idea is that a Registered Land Surveyor compiles existing deeds in the area of the property in question and Retraces the boundary lines in his/her best professional judgment in order to place the actual Boundary Lines for any multitude of purposes. (Typically for a property sale, but also could be for property improvements--like a house, fence, barn, etc.) This type of Survey will follow old deeds of record, plats, or other recorded information and will not be creating a new parcel of land. ORIGINAL SURVEYS More new homes and construction are completed on property described by Original Surveys than any other type of Boundary See DABEC Digest in handout Type of Surveys in Indiana 1. Original Surveys are executed for the purpose of locating and describing the lines of the subject property which has not been previously described in record documents. 2. Retracement Surveys are executed for the purpose of retracing the lines of the subject property as previously described in record documents. 3. Route Surveys are executed for the purpose of determining the lines of multiple proposed acquisition parcels required for highway, railroad, waterway, pipeline, electric line, linear transportation, or utility purposes. Rule 12 excerpt [in handout] Surveyor Location Reports are designed for use by a title insurance company with loan policies on small tracts containing one (1) to four (4) family houses, even if now used for commercial purposes. A surveyor location report shall not be used for nonresidential tracts greater than two (2). No corner markers are set and location data is based on limited accuracy measurements.

5 , Inc. Title Insurance Differences Lenders Title Insurance (Loan Policy):»»Protects lenders interests, typically prorated in the amount of original purchase, as long as lender maintains interest in the property»»focus is on protecting loan value. This includes title, improvements, zoning, etc. Owners Title Insurance:»»Protects title claim, typically in amount of original purchase, as long as owner (or heirs) maintain interest in the property»»focus is on protecting title, ownership, and interests. Not focused on improvements, zoning, etc.

6 , Inc. ILTA

7 , Inc. Perspective on Surveys Seller Purchaser Prove title is marketable Money out of pocket Limit liability:»» Disclose issues (e.g. gaps, overlays, encroachments, easements, utilities, etc.)»» Provides notice to Purchaser»» Reduces probability of litigation Receive assurance that title is marketable, property/facilities can continue to be used Provide foundation/planning for:»» Future use (e.g. gaps, overlays, encroachments, easements, utilities, etc.)»» Potential development/expansion of existing improvements

8 , Inc. Perspective on Surveys Lender Protecting value of loan/collateral»» Includes title (gaps, overlays, easements, utilities, etc.)»» Includes use (zoning, access, utilities, etc.)»» Includes facilities (buildings, parking, utilities, etc.)

9 , Inc. Why have an ALTA/ACSM Remove Survey Exception 2. Remove Special Exceptions 3. Obtain Endorsements 4. Limit Liability

10 (i) forgery, fraud, undue influence, duress, incompetency, incapacity or impersonation; (ii) failure of any person or Entity to have authorized a transfer or conveyance; (iii) a document affecting Title not properly created, executed, witnessed, sealed, acknowledged, notarized or delivered; (iv) failure to perform those acts necessary to create a document by electronic means authorized by law;, Inc. Why have an ALTA/ACSM Remove Survey Exception (v) a document executed under a falsified, expired or otherwise invalid power of attorney; (vi) a document not properly filed, recorded or indexed in the Public Records including failure to perform those acts by electronic means authorized by law; or (vii) a defective judicial or administrative proceeding. (b) The lien of real estate taxes or assessments imposed on the Title by a governmental authority due or payable, but unpaid.,ogo? A (c) Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the The term "encroachment" includes Land. encroachments of existing improvements located on the Land onto adjoining land, and encroachments onto the Land of existing improvements located on adjoining land. Unmarketable Title. No right of access to and from the Land. The violation or enforcement of any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to use, of (a) the occupancy, or enjoyment the Land; (b) the character, location of any improvement erected on the Land; dimensions, or the subdivision of land; or (c) (d) environmental protection a notice, describing part the Land, is recorded in the Public Records setting forth the violation or intention if any of to enforce, but only to the extent of the violation or enforcement referred to in that notice. 06LCR1 6/06 KMS ALTA Loan Policy (6/ 17/ 06)

11 , Inc. Why have an ALTA/ACSM Remove Special Exceptions i. Easements most common ii. Encroachments iii. Zoning issues (parking, height, area, etc.)

12 , Inc. i. Access ii. Contiguity iii. Zoning Why have an ALTA/ACSM Obtain Endorsements - Pt 1 Endorsement Form 1-06 Street Assessments ( ) Endorsement Form 2-06 Truth in Lending ( ) Endorsement Form 3-06 Zoning Unimproved Land ( ) Endorsement Form Zoning - Completed Structure ( ) Endorsement Form 4-06 Condominium ( ) Endorsement Form Condominium ( ) Endorsement Form 5-06 Planned Unit Development ( ) Endorsement Form Planned Unit Development ( ) Endorsement Form 6-06 Variable Rate Mortgage ( ) Endorsement Form Variable Rate Mortgage - Negative Amortization Endorsement Form 7-06 Manufactured Housing Unit ( ) Endorsement Form Manufactured Housing - Conversion; Loan ( ) Endorsement Form Manufactured Housing - Conversion: Owner s ( ) Endorsement Form Environmental Protection ( ) Endorsement Form 9-06 Restrictions, Encroachments, Minerals ( ) Endorsement Form Restrictions, Encroachments, Minerals Owner s Policy: Unimproved Land ( ) Endorsement Form Restrictions, Encroachments, and Minerals - Owner s Policy: Improved Land ( ) Endorsement Form Restrictions, Encroachments, Minerals - Loan Policy Endorsement Form Restrictions, Encroachments, Minerals - Owner s Policy: Unimproved Land ( ) Endorsement Form Restrictions, Encroachments, Minerals - Owner s Policy: Improved Land ( ) Endorsement Form Assignment ( ) Endorsement Form Assignment and Date Down ( )

13 , Inc. i. Access ii. Contiguity iii. Zoning Why have an ALTA/ACSM Obtain Endorsements - Pt 2 Endorsement Form Mortgage Modification ( ) Endorsement Form Aggregation ( ) Endorsement Form Leasehold - Owners ( ) Endorsement Form Leasehold - Loan ( ) Endorsement Form Future Advance - Priority ( ) Endorsement Form Future Advance - Knowledge ( ) Endorsement Form Future Advance - Letter of Credit ( ) Endorsement Form Future Advance - Reverse Mortgage ( ) Endorsement Form Non-Imputation - Full Equity Transfer ( ) Endorsement Form Non-Imputation - Additional Insured ( ) Endorsement Form Non-Imputation - Partial Equity Transfer ( ) Endorsement Form Mezzanine Financing ( ) Endorsement Form Access and Entry ( ) Endorsement Form Indirect Access and Entry ( ) Endorsement Form Single Tax Parcel ( ) Endorsement Form Multiple Tax Parcel ( ) Endorsement Form Contiguity-Multiple Parcels ( ) Endorsement Form Contiguity-Single Parcel ( ) Endorsement Form First Loss-Multiple Parcel Transactions ( ) Endorsement Form Creditors Rights ( ) Endorsement Form Location ( ) Endorsement Form Location and Map ( ) Endorsement Form JR1 - Supplemental Coverage ( ) Endorsement Form JR2 - Revolving Credit / Variable Rate ( )

14 , Inc. Why have an ALTA/ACSM Limit Liability Seller»» Disclose issues (e.g. gaps, overlays, encroachments, easements, utilities, etc.)»» Provides notice to Purchaser»» Reduces probability of litigation Lender Purchaser»» Includes title (gaps, overlays, easements, utilities, etc.)»» Includes use (zoning, access, utilities, etc.)»» Includes facilities (buildings, parking, utilities, etc.)»» Receive assurance that title is marketable, property/facilities can continue to be used

15 , Inc. What is an ALTA Survey? 1. General Requirements 2. Table A i. Customize survey for specific requirements ii. Typical Items iii. Add-cost Items iv. Expensive Items

16 , Inc. What is an ALTA Survey? 1. General Requirements Detailed annotated compilation of all record information (deeds, zoning, easements, and plats) and of all observable on-the-ground information (stakes, buildings, infrastructure, and use) Must use current standards, per ALTA. Purchase agreements are often out of date. See handout packet for: Rule 12 - Indiana Survey Requirements ALTA Standards

17 , Inc. What is an ALTA Survey? 2. Table A i. Customize survey for specific requirements ii. Typical Items 1. Monuments placed (or a reference monument or witness to the corner) at all major corners of the boundary of the property, unless already marked or referenced by an existing monument or witness to the corner; 2. Vicinity map showing the property surveyed in reference to nearby highway(s) or major street intersection(s); 3. Flood zone designation (with proper annotation based on federal Flood Insurance Rate Maps or the state or local equivalent, by scaled map location and graphic plotting onl.); 4. Gross land area (and other areas if specified by the client;. 8. Substantial, visible improvements (in addition to buildings) such as billboards, signs, parking structures, swimming pools, etc.; 10. Indication of access to a public way on land such as curb cuts and driveways, and to and from waters adjoining the surveyed tract, such as boat slips, launches, piers and docks;? 14. The distance to the nearest intersecting street as designated by the client;

18 , Inc. What is an ALTA Survey? 2. Table A iii. Add-cost/Reasonable Items 6. List setback, height, and floor space area restrictions disclosed by applicable zoning or building codes (beyond those required under paragraph 5d of these standards). If none, so state. The source of such information must be disclosed. See Note above; 7. (a) Exterior dimensions of all buildings at ground level (b) Square footage of: (1) exterior footprint of all buildings at ground level; 9. Parking areas and, if striped, the striping and the type (e.g. handicapped, motorcycle, regular, etc.) and number of parking spaces; 11. Location of utilities (representative examples of which are shown below) existing on or serving the surveyed property as determined by: (a) Observed evidence; 13. Names of adjoining owners of platted lands;

19 , Inc. What is an ALTA Survey? 2. Table A iv. Expensive Items 5. Contours and the datum of the elevations; 7. (b) (a) Square Exterior footage dimensions of: of all buildings at ground level (2) gross floor area of all buildings; or (3) other areas to be defined by the client. (c) Measured height of all buildings above grade at a defined location. If no defined location is provided, the point of measurement shall be shown; 9. Parking areas and, if striped, the striping and the type (e.g. handicapped, motorcycle, regular, etc.) and number of parking spaces; 11. (b) Observed evidence together with evidence from plans obtained from utility companies or provided by client, and markings by utility companies and other appropriate sources (with reference as to the source of information) railroad tracks and sidings; manholes, catch basins, valve vaults or other surface indications of subterranean uses; wires and cables (including their function, if readily identifiable) crossing the surveyed premises, all poles on or within ten feet of the surveyed premises, and the dimensions of all crossmembers or overhangs affecting the surveyed premises; and utility company installations on the surveyed premises. 15. Rectified orthophotography, photogrammetric mapping, laser scanning and other similar products, tools or technologies may be utilized as the basis for the location of certain features (excluding boundaries) where ground measurements are not otherwise necessary to locate those features to an appropriate and acceptable accuracy relative to a nearby boundary. The surveyor shall: (a) discuss the ramifications of such methodologies (e.g. the potential accuracy and completeness of the data gathered thereby) with the title company, lender and client prior to the performance of the survey; and (b) place a note on the face of the survey explaining the source, date, relative accuracy and other relevant qualifications of any such data;

20 , Inc. What is an ALTA Survey? 2. Table A - Common Issues TABLE A OPTIONAL SURVEY RESPONSIBILITIES AND SPECIFICATIONS NOTE: The items of Table A must be negotiated between the surveyor and client. It may be necessary for the surveyor to qualify or expand upon the description of these items, e.g., in reference to Item 6, there may be a need for an interpretation of a restriction. The surveyor cannot make a certification on the basis of an interpretation or opinion of another party. Items 16, 17 and 18 are only for use on projects for the U.S. Department of Housing and Urban Development (HUD). If checked, the following optional items are to be included in the ALTA/ACSM LAND TITLE SURVEY, except as otherwise negotiated: 16. Observable evidence of earth moving work, building construction or building additions within recent months; 17. Any changes in street right of way lines either completed or proposed, and available from the controlling jurisdiction. Observable evidence of recent street or sidewalk construction or repairs; 18. Observable evidence of site use as a solid waste dump, sump or sanitary landfill.

21 , Inc. Typical Issues or Problems 1. Client s Name & Billing Information per ALTA requirements 2. Title Commitment i. Referenced Documents - provided by Owner ii. Contact Person 3. Complete list of all parties 4. Form of Certification 5. Utility Location 6. Physical Site Issues 7. Timeline often too short

22 , Inc. Typical Issues or Problems 4. Form of Certification...ALTA and NSPS agree that a survey that does not use the required short-form ALTA/ACSM certification specified in the standards cannot even be called an ALTA/ACSM Land Title Survey... Gary Kent quotation excerpt from ACSM Bulletin dated 07/06 [in handout]

23 , Inc. Typical Issues or Problems 6. Physical Site Issues i. Accessibility (fences, security, safety training) ii. Obstructions (vehicles, storage, structures) iii. Foliage (aerial obstruction, limits visibility) iv. Snow Cover (severly limits ground visibility)

24 , Inc. Problems, Projects, and Promises Principals: (front left, clockwise) Duane Brown, Casey Erwin, Daniel Brown, David Brown, and Brian Brown. Problems Solved. Projects Delivered. Promises Kept. Six simple words that illustrate our commitment to our clients. We believe this vision is the separation between average professional services firms and excellent ones. We utilize our expertise to solve your Problems, our experience to deliver your Projects, and put our integrity on the line to keep our Promises.,OGO? A Clients, not Customers Surveying: With licensed professional engineers and surveyors in Indiana, Michigan, and Ohio we believe our company is uniquely positioned to assist our clients in real estate transactions, developments, and other areas requiring Civil Engineering and Surveying expertise. We specialize in development activities and ALTA/ACSM surveys (particularly very difficult, short time-line surveys) and have an extensive base of loyal clients that depend on us to help them meet their deadlines with professionally completed surveys and site designs.»» Topographic Surveys»» Construction Staking»» Control Networks»» Boundary Retracement Surveys»» ALTA/ACSM Land Title Surveys»» Right of Way Surveys & Mapping»» Hazardous Site Surveys»» As-Built Surveys»» Infrastructure Surveys»» Digital Terrain Models (DTM) DABEC strives to develop each and every customer into a loyal client. We accomplish this by protecting our clients interests at every turn. Far from a one dimensional engineering business, DABEC strives to provide a broad spectrum of professional services in a variety of fields. Use our extensive experience to complete your challenging project from start to finish. Engineering:»» Transportation Design (Roads & Trails)»» Utility Design (Sanitary Sewer & Water Supply)»» Storm Sewers (Pipes, Detention & Flood Modeling)»» Grading Plans (Dirt Calculations, Site Balance)»» Securing Approvals (Local, State & Federal)»» Hydraulic Modeling/Flood Plain Modeling»» Platting Process for Developments»» Bid Tabulation»» Permits, Applications & Approvals»» Public Bidding Services»» Utility Extension Design»» Lift Station Design»» Land Planning