When insuring title to a mortgagee only on 1-4 Family Residential properties up to $1 million in a platted subdivision, a survey is no longer required to give coverage for survey matters when utilizing an ALTA Loan Policy or Short Form Policy. This change does not apply to owner’s policies, construction loan policies, new construction, acreage tracts, commercial loans, or residential properties for more than four families. Exceptions must still be made for recorded easements and any unrecorded easements you may discover from an old survey, a prior policy, or other reliable source. (The above guideline does not apply to the State of Florida.)
When insuring property not within a platted subdivision, wherein the lender requires title insurance be given without exception to survey matters, but is not requiring that a new survey be ordered, Agents National Title will accept prior surveys issued to the current owner within 6 years provided the property is a refinance only of residential property and an affidavit has been obtained from the current owner stating that there have been no improvements to the insured property since the date of that prior survey. The survey cannot be used to delete the survey exception when issuing a policy for a resale.
The following pages contain surveys that are examples of encroachments or other survey matters that require specific types of underwriting treatment. Examples number 1 and 2 are acceptable for affirmative coverage, and examples number 3 and 4 must be listed as exceptions.
Example 1
The encroachment of the shed onto the public utilities and drainage easement and the minor fence encroachment may be insured utilizing the following wording:
“Encroachment of a shed into the 20’ public utilities and drainage easement and the encroachments of the fence along the southerly lot line of Lot #48. The company hereby insures against loss or damage which the insured shall sustain by reason of the entry of any court order or judgment which constitutes a final determination and requires the removal of the existing improvements because of the encroachments or encroachments thereof.”
NOTE: The preferred method for providing affirmative coverage is by endorsement.
Example 2
The encroachment of the house onto the minimum building setback line may be insured affirmatively using the following language:
“The survey dated ____ by (Surveyor), shows a two foot encroachment of the house and improvements over the 50’ minimum building setback line. The company hereby insures against loss or damage which the insured shall sustain by reason of the entry of any court order or judgment which constitutes a final determination and requires the removal of the existing improvements because of the encroachments or encroachments thereof.”
NOTE: The preferred method for providing affirmative coverage is endorsement.
Example 3
The shed and concrete pad may not be insured and must be included in Schedule B as an exception. The exception may be worded as follows:
“Nine foot encroachment of shed and concrete pad over the northerly lot line onto adjoining Lot #76.”
Example 4
The encroachment of the neighbor’s fence and subject property fence are not insurable. The following exception from coverage must be made:
“Encroachment of the neighbor’s fence over the southerly lot line onto the subject premises and the encroachment (projection) of the fence over the northerly lot line onto the adjoining Lot #62, and any right, title or interest or claim thereof in or to the insured land by adjoining owners.”
By no means do the above examples demonstrate all of the situations that may occur when insuring title to property. However, the illustrations do show situations that occur fairly frequently and are also indicative of Agents National Title’s treatment of different types of encroachments and/or survey matters.
See also: