The title policy’s purpose is to advise you of all the conditions of the property. Not just what you see physically when you go to the property, but all of those items that are recorded at the court house that could affect your ability to purchase the property “free and clear” of any defects. If a boundary survey is performed on a property, the title company will review the survey and may exclude certain conditions of the property from insurance coverage.
Some of the most common items include:
- Fences. This is probably the #1 headache for all surveyors and title companies. There is a false sense of ownership when someone sees a fence. It is assumed that the fence is “built on the property line”, but rarely is that the case. Fences can be built way inside of property lines or built way over the property line onto the neighbors property. If they are built in the wrong place, chances are the title company is not going to insure their location. This means if the neighbor comes and tells you to move your fence onto your own property, the title company is not going to pay for the fence to be moved. That will be your expense since they put an exception on the title insurance policy.
- Driveways. When you have a 50 foot wide lot with a 30 foot wide house built in the center of the lot and you have a 12 foot wide driveway on one side, chances are you’ve got two feet of your driveway onto the neighbor’s property. This is a concern because if the neighbor tells you to remove your driveway from their property, the title company does not want to bear the financial responsibility for this, so they put an exception on the title policy.
- Easements. Developers and individuals grant easements to utility companies and individuals to use the land that you are purchasing. If the survey shows that such an easement runs through the corner of the house, the title company doesn’t want to take on the risk of having to compensate the utility company or individual for moving their line or creating new easement documents, hence it may be listed as an exception on your title policy.
There are many intricacies of a title commitment. Reviewing it (prior to getting to the closing table) with a knowledgeable source can save you from taking on risks that you don’t understand. The land surveyor can address those items listed in the commitment that are of a survey nature.