The Ins and Outs of Title and Survey Issues in Commercial Real Estate Transactions

In real estate transactions, title and survey issues are critical matters that can significantly affect land use and development. It is essential for sellers, purchasers, and lenders to support the title insurance commitment with a land survey for the transaction. In doing so, they will verify ownership, land boundaries, and any potential encumbrances, defects, or restrictions on the property that could affect marketability or interfere with the purchaser’s proposed use of the land. Title problems such as adverse ownership interests and unreleased liens can delay the closing of the transaction or derail it entirely. Survey issues such as boundary disputes, unrecorded easements, and encroachments onto the land or onto adjacent land also can delay the closing and affect the value and potential future use of the property. This article examines the types of land surveys with a focus on the ALTA/NSPS Land Title Survey, the title company’s requirements for removing survey exceptions in the policy in reliance on a land survey, and survey-related title endorsements that rely on a land survey to provide expanded coverage to the insured.

Purchasers or the lenders financing land purchases or refinancing typically require a survey before agreeing to provide financing. The required survey will assess the property’s boundaries, confirm access to and from the land, review the location of improvements, and determine whether there are encroachments, easements, or other survey-related matters that could affect the value or use of the land. Purchasers and lenders want to be certain there are no survey issues that would affect the marketability of title or interfere with the use of the property. Title companies also rely on a survey to identify the following: discrepancies in boundary lines; differences between the legal description of record and as surveyed; the existence of water features affecting the property or implicating riparian rights; problems with the legal description, including deed record overlaps with an adjoiner, or failure of the legal description to close; the presence of utility markers evidencing underground lines, cemeteries, drainage ditches, railroad tracks, and party walls; and the existence of unrecorded easements and encroachments. A title policy benefits both the lender and purchaser because it protects both against loss or damage from hidden risks, unpaid taxes, outstanding liens, and ownership disputes. For the lender, the title insurance policy also protects the lender’s investment by ensuring that the lender is in first lien position.

Title companies also rely on surveys to delete the standard survey exception from the title commitment and policy at the insured’s request. Although the exact wording of the general or standard survey exceptions in the policy may vary by title insurance underwriter and depend on the jurisdiction in which the property to be insured is located, the following language is representative of the survey exceptions typically found in a title commitment or policy:

1. Easements or claims of easements not shown by public records.
2. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting title that would be disclosed by an accurate or complete survey of the land.

In commercial transactions, title companies will rely on a survey to issue survey-related endorsements, which will be discussed later in this article. The terminology for requesting deletion of the survey exception differs throughout the country but is often “deletion of the survey exception,” “affirmative survey coverage,” “expanded or extended coverage,” or a request to “insure over survey matters.” In some states, regulations prohibit removal of the survey exception and restrict coverage to an endorsement to the policy that is filed or approved by state regulators. Attorneys should consult a local title company regarding the availability of survey coverage or deletion of the survey exception in the state where the property to be insured is located.

Types of Land Surveys

Real estate law practitioners need to be familiar with several types of land surveys. In the residential setting, the most common survey is known by several names, including location survey, mortgage survey, and title survey. Typically defined by the state law of the jurisdiction where the property is located, these laws keep the cost of land surveys affordable for residential acquisitions. Only the title company and the lender may rely on this type of survey, not the home purchaser. These surveys typically are not boundary surveys. Despite this limitation, some title companies have accepted location surveys in commercial transactions to provide survey coverage on the title policy. Real estate practitioners must advise their clients that although using a location survey in commercial transactions may be acceptable to the title company and can save money, it does not provide the same assurances as a boundary survey. This could lead to boundary disputes and title claims. So, a safer approach is to invest in a more comprehensive boundary survey.

The next survey commonly found in a real estate legal practice is the boundary survey. Like residential surveys, the scope of a boundary survey typically is defined in state law. A boundary survey determines the location of property lines and corners of a property described in a conveyance document, such as a deed. A boundary survey does not include the improvements located on the property.

When the improvements on a parcel of land are incorporated into a boundary survey, the result is known as an as-built survey. One generally would order this survey upon completing a construction project to confirm that the planned improvements were constructed in the correct locations as shown in the site plan and preliminary construction drawings.

In the simplest sense, incorporating the matters set forth in an American Land Title Association (ALTA) title commitment into an as-built survey turns the as-built survey into an ALTA /NSPS Land Title Survey as long as the surveyor also satisfies the minimum standard detail requirements set forth by ALTA and the National Society of Professional Surveyors (NSPS).

The ALTA/NSPS Land Survey

The ALTA/NSPS Land Title Survey (ALTA Survey) was created to satisfy the title insurance industry’s desire for uniformity in the documents needed to underwrite a commercial real estate acquisition or loan. As discussed above, title companies require a land survey to delete the survey exception, and the ALTA Survey has become the gold standard for doing so. When provided to title underwriters, they will remove the general exception and list only exceptions they find in the ALTA Survey. Examples of these exceptions include building and setback encroachments, legal description errors, height or parking violations, and many other matters that require the detail shown by an ALTA Survey.

Here are some practice pointers for the commercial real estate professional:

1. The drafters of the ALTA/NSPS Minimum Standards acknowledge that certain properties or interests in real property such as marinas, mobile home parks, easements, leases, and other non–fee simple interests may have issues beyond what are contemplated by the minimum standards and the scope of work may need to be discussed and negotiated. For example, lenders will often require that the manufactured homes be located on an ALTA Survey of the mobile home park to evidence compliance with setback requirements. The ALTA/NSPS Minimum Standards do not require that the surveyor locate manufactured homes on the survey, so negotiating this additional scope of work should be considered.
2. The ALTA Standards require that the surveyor receive complete copies of the most recent title commitment or, if a title commitment is not available, other title evidence satisfactory to the title insurer. Some attorneys assume that the surveyor will obtain these documents as part of the survey. The surveyor will rely on the title company to provide these. Also, some surveyors will not start the survey until they receive these documents. This may extend their timeline and cause closing delays. You and the surveyor should agree on when the surveyor will begin work and what they will need to do.
3. Ask for the correct Table A Optional Items and understand their cost. Many surveyors will charge additional fees for each Table A Optional Item needed, so check with your lender to obtain its survey requirements and include the desired optional items with your original contract with the surveyor.
4. Determine the flood zone classification of the property yourself by checking FEMA flood maps. If any part of the property is in a flood zone, you or your lender may want the surveyor to issue a Flood Elevation Certificate, which identifies the base flood elevation and the elevation of the base floor of improvements. A return trip by your surveyor to obtain this information typically will cost more than had you ordered it with the original work.
5. The height limitations for improvements from the local municipality and the location and way the municipality requires the measurements be taken. Instruct the land surveyor to take the improvement measurements in this way. If you do not instruct the land surveyor, the surveyor may need to return to take those measurements and will typically charge you an additional fee.
6. Utilities observed by the land surveyor must be shown on the ALTA Survey. This is a change from the prior ALTA Standards, which required Table A Optional Item 11(a) to be selected, which is no longer required. Table A Item 11(a) now requires that you provide the land surveyor with utility plans to supplement the survey. Table A Item 11(b) now requests that the surveyor engage a private utility location service to estimate the location of underground utilities. This can be a costly addition and not something typically needed unless construction or development is planned for the site.
7. Consider whether depicting an offsite easement rather than having the land surveyor survey it under Table A Item 18 will satisfy your needs and those of the lender. This is a less costly approach that often provides all that is needed.

Title Requirements to Delete the Survey Exception

To understand the effect of deletion of the standard survey exception in a title insurance policy, one must consider the survey coverage built into the 2021 ALTA owner’s and loan policies. Covered Risk 2(c) in the ALTA 2021 owner’s and loan policies insures against:

[a]ny defect in or lien or encumbrance on the Title … including but not limited to, insurance against loss from … the effect on the Title of an encumbrance, violation, variation, adverse circumstance, boundary line overlap, or encroachment (including an encroachment of an improvement across the boundary lines of the Land), but only if the encumbrance, violation, variation, adverse circumstance, boundary line overlap, or encroachment would have been disclosed by an accurate and complete land title survey of the Land.

(Emphasis added.)

This covered risk is limited by the standard general exception for survey matters discussed above. If the survey exceptions are not deleted, the policy will include no coverage for loss or damage arising out of encroachments over boundary or setback lines, boundary line issues, adverse possession or prescriptive easement claims, and shared driveways or apparent easements not of record. A typical requirement for a survey in Schedule B-I of the ALTA title commitment says: “In order to delete the general survey exceptions from Schedule B-I of the policy, an accurate and complete survey meeting the Company’s requirements [may directly reference the type of survey required such as the ALTA/NSPS] must be furnished to the title company.” If the survey reveals encroachments, encumbrances, violations of setback lines, boundary line issues, or other adverse circumstances, the same will be “read” into the policy by the title company and those matters will appear as exceptions in the commitment and policy. Note that the insured must give the survey to the title company. This requirement follows established case law holding that the title insurer does not have a duty to obtain a survey to issue a title insurance policy. See Kuhlmann v. Title Ins. Co. of Minn., 177 F. Supp. 925 (W.D. Mo. 1959). It is up to the insured to obtain a survey and correspondingly negotiate with the surveyor those items that should appear on the survey to benefit the surveyor’s client, the title insurer issuing the title policy, and the lender providing financing for the transaction.

Note also that the survey must be “an accurate and complete survey meeting the Company’s requirements.” What is an “accurate and complete” survey? Courts have held that title insurers are not liable for encroachments, boundary line disputes, or other matters if an inadequate survey fails to disclose them. Section 1 of the 2021 ALTA/NSPS survey standards states that title companies, lenders, and their respective customers and insureds may rely on surveys that are of professional quality and appropriately uniform, complete, and correct. Section 1 defines “complete” as the on-site fieldwork, the preparation of a plat of the land title survey in relation to documents provided or obtained by the surveyor from the title company, any information from Table A items requested by the client, and the surveyor’s certification of a survey.

From a title insurer’s perspective, the most accurate and complete survey is the ALTA Survey. The ALTA Survey is the survey of choice for commercial transactions that involve higher dollar and policy amounts. The ALTA Survey provides a detailed survey in a standardized format that can be used for as-built and recently completed construction. Each title insurance underwriter establishes its own guidelines for reliance on a survey and dictates what type of survey will be considered a correct and complete survey for the transaction. For example, the title company may accept a location report for a residential transaction but require an ALTA/NSPS-certified surveyor for a commercial transaction. The accepted standard for commercial transactions is an ALTA Survey, and in residential transactions, a correct and complete survey typically is the less comprehensive mortgage survey or location report. Title companies will accept a less detailed survey on residential properties because they have determined by review of claims history that there is less risk in residential transactions on platted lots or metes and bounds parcels with low acreage.

Upon receipt, the title company will conduct a detailed review and examination of the survey. The title company will then make appropriate Schedule B exceptions in lieu of the general survey exception for such matters as unrecorded easements, overlaps, encroachments, easements located outside the recorded easement boundaries, and other possessory interests and matters disclosed by the survey. If the title company also has actual knowledge of a survey matter, appropriate exceptions for survey matters must be added to Schedule B.

Deleting the Survey Exceptions Without a Survey

There are instances where a title insurer will not require a survey in order to delete the standard survey exception based on claims history and lower risk assessment. This may be cost saving for your client. Each title insurer will have its own guidelines and requirements, so you should consult with your local title company on their requirements. There usually is a distinction between the requirements for residential and those for commercial transactions. For example, if the property is a 1–4-family residential dwelling located on a platted subdivision lot, the title insurer may not require a survey in order to delete the general survey exception for a loan policy or an owner’s policy up to a certain liability amount. The title insurer also may limit the amount of acreage of land that will be acceptable for agreeing to delete the survey exception from the policy without a survey. In the commercial space, many title insurers will agree to delete the survey exception without a survey for a loan policy up to a certain amount of policy liability such as $10–25 million. One significant exception to the waiver of the requirement of the survey is if there is new or recently completed construction. Survey coverage without a survey is also not available where state regulations require a survey in order to delete the survey exception.

Another cost-saving option for your client to consider is whether the title company will delete the survey exception based on a prior survey. The general requirement for a title company to rely on a prior survey is the execution of a no-change-since-the-date-of-the-last-survey affidavit signed by the owner or the seller in a purchase transaction stating that there have been no changes, there are no new encroachments or easements, and there has been no new construction. Each title insurer will have its own form. There is not a standardized ALTA form. The title company may limit the age of the survey that will be eligible for a no-change affidavit. Generally, a survey that is older than the timeframe to establish adverse possession in the state where the property is located will not be acceptable, and the title company will require a new survey or an older survey to be updated and re-certified. Surveys that are older than acceptable may be considered case by case. It is up to the discretion of the title underwriter whether it will accept a no-change affidavit. If the title company is not willing to accept a no-change affidavit to provide survey coverage to the date of the current transaction, another option would be to negotiate a limited exception for survey matters after the date of the prior survey. This option also may be relevant if the no-change affidavit provided to the title company discloses improvements or construction after the date of the prior survey.

Recordation of the Land Survey

Normally, a survey on the property to be insured as part of a refinance or purchase transaction need not be recorded in public records unless state or local law requires it. Common reasons for recordation include the resolution of property line disputes under state statutes and a final order issued in a quiet title or partition suit establishing new boundaries. Some states, such as South Carolina, customarily record a survey plat of the legal descriptions of the land to be conveyed. In certain rural, mountainous, or coastal areas, it may be difficult to determine boundary lines, and it is customary practice in these areas to record a survey. Recording a survey also may be required for parcel splits or subdivision of land in compliance with state statute or county ordinance.

The following is a discussion of several ALTA endorsements that are survey-related and depend on the review of a survey acceptable to the title company for issuance with the policy.

ALTA 17-06, Access and Entry Endorsement

Subject to policy exclusions, conditions, and exceptions, Covered Risk No. 4 in the ALTA owner’s and loan policies provides coverage against loss or damage, not exceeding the amount of insurance, sustained or incurred by the insured due to “no right of access to and from the Land” as of date of the policy. The owner’s and loan policies also contain a limitation in Condition 1(g) of the owner’s policy and 1(i) of the loan policy stating that the definition of land includes no right, title interest, or easement in abutting streets, roads, avenues, alleys, lanes, ways, or waterway, but this does not modify or limit the extent that a right of access is insured by that policy.

It is well-established by case law that the access coverage in the policy provides legal access only. Courts have interpreted legal access under the policy to mean the land abuts a public road. The policy does not insure (1) access to a particular public road or street; (2) the type of access; (3) the physical condition or width of access; or (4) that the public road is physically open or publicly maintained. The ALTA 17-06 provides expanded access coverage in the title policy. It insures against loss or damage if, as of date of policy, (1) the land does not abut and have actual vehicular and pedestrian access to a designated public street; (2) the public street is not physically open and publicly maintained; and (3) the insured has no right to use the existing curb cuts or entries along the portion of the street that abuts the land. The endorsement is available for an owner’s or loan policy. To issue this endorsement in a commercial transaction, the title company will rely on a review of an ALTA Survey or another survey that meets the company’s guidelines for confirmation that the insured land abuts a street designated as a public road on the survey, the road is shown as physically open on the survey, and the survey depicts curb cuts or entry points that provide actual vehicular and pedestrian access to the land without gaps or gores. The title company also will verify with the county, state, or municipality that the road is publicly maintained.

ALTA 17.1-06, Indirect Access Endorsement

The ALTA 17.1-06 endorsement provides coverage against loss or damage, at the date of policy, if the easement identified in Schedule A of the policy does not provide the land identified in Schedule A of the policy actual vehicular and pedestrian access to a public street, the street is not physically open and maintained, or the insured has no right to use existing curb cuts or entries along the portion of the street that abuts the easement. The endorsement applies when access to the public street is by way of an easement shown as an insured estate in Schedule A of the policy. The endorsement is available for an owner’s or loan policy. To issue this endorsement, the title company will review an ALTA Survey or other survey that satisfies the company’s requirements to confirm that the survey depicts the recorded easement or easement to be recorded, the easement abuts the land and the designated public street, and the land has actual vehicular and pedestrian access to a physically open and publicly maintained street through the easement insured in Schedule A of the policy.

ALTA 17.2-06, Utility Facility Endorsement

The ALTA 17.2-06 endorsement insures against loss or damage if the insured lacks a right of access to the utilities specified in the endorsement in rights-of-way or easements benefiting the land due to (1) a gap or gore between the insured land and the right-of-way or easement; (2) a gap between the boundaries of the rights-of-way or easements, or (3) termination by the grantor or successor of the right-of-way or easement. The endorsement is set out in a “check the box” format for water, electrical , natural gas service, telephone service, electrical power service, sanitary sewer, and stormwater drainage. The endorsement also includes fillable blanks for additional services not included. Recently, there have been requests to add internet service to this list. This endorsement is available for an owner’s or loan policy. The endorsement does not insure the right to hook up to the utility or service line. It ensures only the availability to do so in the right-of-way or private easement. To issue this endorsement, the title company will review the survey to confirm whether the identified utility and service lines are in the public right-of-way or a private easement benefiting the property. The title company is looking for more than a designation that there is a platted utility easement or a private easement in which lines could be located. The title company is looking for evidence of actual physical lines in the right-of-way or easement depicted on the survey. It is more difficult to issue this endorsement on vacant property to be developed because utility or service lines may be depicted only on plans and not actually physically located on the property. Sometimes, the title company may request additional documentation such as letters from the utility company confirming it services the property or maps showing the location of a utility line.

ALTA 19-06, Contiguity Endorsement—Multiple Parcels Endorsement

This endorsement insures that two or more parcels insured in Schedule A are contiguous along defined boundary lines and insures that there are no gaps along the common boundary line of the parcels. It may be issued with the owner’s or loan policy. The title company will examine an ALTA Survey or other survey acceptable to the company depicting all the parcels referenced therein and confirm that there are no overlaps, gaps, or gores among the parcels. Lines are identified within the endorsements by a direction such as “failure of the east property line of Parcel A to be contiguous to the west boundary line of Parcel B.” Sometimes, an insured may request language in the endorsement that the parcels are contiguous along contiguous lines, common lines, or adjacent lines. The title company may agree to use this language after reviewing the survey for contiguity of parcels, especially if the insured land is a large assemblage of parcels in a commercial development.

ALTA 19.1-06, Contiguity—Single Parcel

The ALTA 19.1-06 endorsement insures that the insured parcel is contiguous to another uninsured parcel of land along identified boundaries. It also insures that there are no gaps or gores between the two parcels. It may be issued with an owner’s or loan policy. To issue, the company will review an ALTA Survey or other survey that satisfies company requirements and confirm that there are no gaps or gores between the boundary lines of the parcels depicted on the survey. The other parcel may or may not be insured under another title policy. If the other parcel cannot be identified by policy number, effective date, and underwriter, it will need to be identified by the recording information of the vesting deed for the uninsured parcel.

ALTA 19.2-06, Contiguity—Specified Parcels

This endorsement is another option for the insured who would like coverage against loss or damage if parcels are not contiguous. Rather than stating that identified parcels are contiguous along boundary lines, the endorsement insures that identified parcels, as shown on an identified survey, are contiguous. For example, Parcel A is contiguous to Parcel B and Parcel B is contiguous to Parcel C. The same requirements for a survey review apply as for the other endorsements in the ALTA 19 series.

ALTA 22-06, Location Endorsement

The ALTA 22 endorsement insures against loss or damage sustained by the insured due to the failure of a designated improvement to be located on the land at the street address described in the endorsement as of the date of policy. It may be issued with an owner’s or loan policy. The title company will confirm by review of the survey that the designated improvement is located within the boundaries of the land and at the address identified for the property on the survey. If the survey does not include a property address, the title company will confirm the street address from the property tax records, US post office, or other reliable means. If there is a discrepancy relating to the street address and state law permits, the endorsement can be modified, if state regulations permit, to refer to the source of the property address.

ALTA 25-06, Same as Survey Endorsement

The ALTA 25-06 endorsement insures against loss or damage if the land described in Schedule A of the policy is not the same as that identified on a designated survey. The survey relied upon to issue this endorsement must be satisfactory to the title company and depict the land to be insured by the establishment of record boundaries, controls, closure, etc. The title company will review the legal description shown on the title commitment and that shown on the survey along with the drawing on the survey to confirm that all are identical and note any discrepancies. If there are slight discrepancies between the survey legal and the legal record in the title commitment, ask the title company if it will insure both versions in Schedule A. The survey must be certified to the title company and the title underwriter unless otherwise approved by the title underwriter. If the discrepancies involve a lack of closure or calls and distances that vary, the title company will make additional curative requirements. The survey relied on is identified on the face of the endorsement by date, name of surveyor, and job number. This endorsement can be issued with an owner’s or loan policy.

ALTA 25.1-06, Same as Portion of Survey Endorsement

The ALTA 25.1-06 endorsement is a variation of the ALTA 25 endorsement, insuring that a portion of the land shown on the survey is the same as that insured by the policy. The structure of the endorsement is to insure against loss or damage sustained by the insured due to the failure of the land described in Schedule A to be the same as an identified tract or parcel depicted on the survey. The survey relied on is identified in the endorsement by date, name of surveyor, and job number. This endorsement is applicable when, for example, there is a survey of a shopping center or mixed-use development with outparcels and the current transaction involves only a portion of the land to be conveyed or financed. Relying on the survey of the entire development rather than a new survey of the carve-out is a cost-efficient solution for a buyer or borrower. The same requirements as the ALTA 25.1 above relating to the survey are applicable. This endorsement can be issued with an owner’s or loan policy.

ALTA 28-06, Easement—Damage or Enforced Removal

This endorsement is available for an ALTA owner’s or loan policy. It insures against loss because of the forced removal of or damage to existing buildings located on the land because of the exercise of the right of use or maintenance of a specified easement excepted in Schedule B of the policy. This endorsement is beneficial when there is a concern that a specific recorded easement may affect property use or the improvements. The ALTA 28-06 is limited to building coverage only. It does not provide coverage for any parking lot, fencing, retaining walls, signs, etc. The title company will review the location of the easement on the survey vis-à-vis the buildings located on the land and assess the risk as to whether the exercise of the easement will damage the building or require forced removal of the building. If the survey depicts, for example, the easement running under an existing building or a building extends halfway or more into the easement, the title company is likely to make additional requirements to contact the easement holder to terminate or abandon the easement, obtain a consent to encroach to be recorded, or ask for a relocation of the easement. Sometimes, a letter from the utility that it has no physical line in the easement or it relocated the easement to another location will be sufficient for the title company to issue this endorsement.

The ALTA 28 endorsement also can be issued to provide coverage when blanket easements affect the property. A blanket easement lacks a specific description as to its location on the property, creating uncertainty and risk for owners and lenders. The endorsement mitigates the risks by providing coverage if a property owner is required to remove or modify the building on the land due to the exercise of the easement rights by the easement holders. The ALTA 28 is usually requested concerning old blanket utility easements disclosed on the survey as having no identifiable location. To issue the ALTA 28 for a blanket utility easement, the title company typically will evaluate the age of the improvements located on the land, the age and purpose of the blanket easement, the use of the property, and the physical location of existing utilities on the land. To issue this endorsement, the title company may accept a containment letter from the utility in which it agrees to contain its easement rights to the area where the physical line is located. The title company may require relocation of the existing utility line subject to a blanket easement or require recording of an amendment to the easement agreement describing the specific location of the easement. It can be issued with an owner’s or loan policy.

ALTA 28.1, Encroachment—Boundaries and Easements

This endorsement provides coverage against loss or damage arising out of the encroachment of an existing building onto adjoining land or an existing building on adjoining land onto the property to be insured. It also includes coverage for encroachments of an existing building onto an easement. Like the ALTA 28-06, coverage is limited to buildings (or improvements) located on the land. The coverage in the endorsement is subject to any exception in Schedule B specifically identifying the encroachment. There is also forced removal coverage for any improvement located on the land because of the exercise of easement holders’ right of use or maintenance. Unlike the ALTA 28, there are no references to specific easements in Schedule B. The endorsement applies to any easements affecting the property that are excepted in Schedule B. It can be issued with an owner’s or loan policy. If there are designated encroachments that the title company will not cover, they will be specifically excepted explicitly in Section 4. Examples of matters that may be excluded from coverage include encroachment of a building onto a public road or public right of way, a building located on top of an underground easement, encroachment of a building over more than half the width of the easement, or encroachment of an adjoiner’s improvements onto the land for the time of adverse possession or a prescriptive easement under state law. The title company will review an ALTA Survey or another appropriate survey for the type of property to see if the survey depicts any building encroachments over property lines or easements.

ALTA 28.2-06, Encroachment—Boundaries and Easements—Described Improvements

The ALTA 28.2 provides the same coverage as the ALTA 28.1, but coverage can be customized to apply to designated improvements other than a building located on the land. The improvements to be covered can be customized and itemized in Section 2 of the endorsement. If the project you are working on has a unique improvement of concern, such as a bridge, fountain, playground, pickleball court, parking garage or carport, or asphalt parking lot, this endorsement can be tailored to fit the type of improvement that is an issue. This tailoring is common in a multifamily apartment transaction that includes other unique improvements besides the apartment buildings. The requirements to issue are the same as the other ALTA 28 forms in the series. It can be issued with an owner’s or loan policy.

ALTA 28.3-06, Encroachments—Boundaries and Easements—Described Improvements and Land Under Development

This endorsement provides coverage for existing and future improvements. This is the endorsement to request when the property is to be developed or under construction. It can be issued with an owner’s or loan policy. Substantive coverage is the same as the ALTA 28.1 regarding existing improvements, but expands coverage to future improvements to be constructed according to the plans and specifications for the project prepared by the architect or engineer. The definition of improvements covered in the ALTA 28.3 is expanded beyond “building” to include a structure and any paved area, including any road, walkway, parking area, driveway, or curb located on land or adjoiner that constitutes real property by law. The endorsement will reference the plans, name of engineer, date, and job number. The requirements for survey review are the same as for ALTA 28.1 for existing improvements. For future improvement coverage, the title company will want to review the plans and specifications for the project depicting future improvements to be constructed with a survey overlay for review.

Conclusion

Understanding and addressing title and survey issues quickly will provide a smooth path to closing and result in the issuance of a loan or owner’s title policy with coverage beneficial to the insured. Working closely with the title company and surveyor is an essential part of due diligence in real estate transactions to effectively resolve title defects and survey issues to satisfy the needs and goals of counsels’ lender and purchaser clients.