An email from Gary Kent on Land Title survey requirements:
Posted: Thu Mar 07, 2013 11:43 am
Below is an email from Gary Kent that I'm posting with his permission:
Following is a report on what has transpired over the last two years since the 2011 standards were adopted by ALTA and NSPS and became effective on February 23, 2011. It is fairly long, so I apologize ahead of time.
I have attached a list of the suggestions that have been made so far for the next version (likely dated 2016)). As I have always said – if a suggestion is made, it gets on the list - it does not matter if I think it is a good suggestion or a bad one. So, the attached list is simply the raw input; I offer no personal comments or perspectives at this time.
There have also been a few issues that have arisen with respect to the 2011 standards that I want to alert everyone to.
Table A item 19 – Wetlands. We need to modify the language of this item to more clearly reflect what was intended. What it was TRYING to say was simply this: If someone who is qualified to delineate wetlands has been out on the property and has marked their opinion of where the wetlands are, and if the client would like the surveyor to locate those delineation marks and show them on the survey, then they should check this item. The surveyor makes no comments and offers no opinions as to whether the delineations actually represent a wetlands; he or she is simply showing the marks on the survey. In fact, the marks should be identified either on the survey or with a note as to the source (i.e., who set them, if known). It appears, however, that those persons selecting Table A item 19 somehow think the surveyor is going to miraculously turn into a wetlands biologist. That was not the intent, and very, very few surveyors would be qualified to delineate wetlands anyway. It is my suggestion that if someone checks off Item 19, the surveyor should clarify ahead of time what he or she is going to do as a result.
Table A items 6a and 6b: In 2011, ALTA and NSPS decided that the title company should provide the zoning information to the surveyor pursuant to this item. What we have found, however, is that in general title companies do not want to do this. Without going into great detail at this time as to why, after being educated on the issue, I understand their resistance. My suggestion is that if Table A item 6a or 6b is checked off, the surveyor should clarify ahead of time that the title company may not provide the information and ask the client how they would like to proceed: “Pay me to do the research?†or “Pay me to hire someone to do the research?†etc. Some surveyors are reacting by simply ignoring the item if the information is not provided. I do not see this as particularly helpful or professional; we should be part of the solution, not part of the problem, so let’s discuss it ahead of time and decide how to deal with it. To those who would say that they can ignore it because it requires that the information be provided, I would remind you that Table A items are negotiable, so some modification of the item can be made.
Section 4 – Records research: With the 2011 standards, it was agreed between ALTA and NSPS that the title company should provide copies of adjoiner descriptions to the surveyor. As with the zoning issue in Table A item 6, the title companies are sometimes resistant to providing those adjoiner deeds. Again, I understand why, but am not going to go into that here. The bottom line, however, is that in virtually every state, surveyors are responsible for pulling adjoiner deeds and reviewing those deeds - indicating gaps, overlaps or contiguity. The fact that we were foisting the responsibility of pulling those deeds off on the title company was merely going to be handy for the surveyor; it ultimately cannot replace state laws or administrative rules. So if the title company does not provide them, it does not relieve surveyors of doing the research themselves. And again, this is not a violation of the item; Table A items are negotiable, so address this issue up front and request compensation for the additional work if appropriate (remembering that you actually have to do it anyway under your state’s laws).
Section 7 Certification: To the credit of the surveying community, virtually every private lender in the U.S. has acquiesced to using (only and unaltered) the Section 7 certification. The only entities I am personally aware of that are continuing to resist this and insist on their own are HUD Multi-family, Fannie Mae and some state housing authorities that are somehow connected with HUD. My suggestions on how to deal with this issue are these:
o Some of HUD offices are flexible and will actually allow the surveyor to use only the ALTA/ACSM Section 7 certificate. I know this from personal experience and others (including at least one HUD employee) has told me the same thing. Alternatively, however, some HUD offices are not flexible.
o There are no regulations that can be used to tell surveyors they ‘must’ use any certificate - other than as may be mandated by a state board or statute. Surveyors are licensed by their respective states and must comply with their state's laws and the normal standard of care.
o In some states, the state law specifically invokes the ALTA/ACSM Standards. In all cases, I personally believe that the normal standard of care would require that the surveyor follow a current, nationally-recognized standard and accompanying certification.
o Having said all of that … the ALTA/ACSM Standards MANDATE the Section 7 certification and the surveyor MUST use it on the face of the survey. So, how does a surveyor deal with an obstinate attorney?
o The surveyor could provide the HUD certificate on a separate sheet (company letterhead, for example), that cross-references to the survey. That way HUD can have their certificate, but the survey will show the Section 7 certification as mandated by the standards. In my experience, this is often grudgingly accepted.
o Another option is for the surveyor to go ahead and put the HUD certificate on the face of the survey - but then any reference to the 2011 ALTA/ACSM Standards must be removed from the plat/map because it no longer complies with these copyrighted standards. That is usually not acceptable for several reasons.
o I do know from personal experience if the surveyor simply refuses to use the certificate - citing state law, common law and/or the normal standard of care - there will be moaning and groaning and threats, but the loan will likely close. (Which only proves what surveyors already know – the Section 7 certificate adequately protects HUD).
o The HUD "Surveyor's Report" (which is also part of a HUD survey) is, if one takes the time to read the standards, and if the appropriate Table A items were selected, completely and inexplicably redundant, given that the Section 7 certification has the surveyor certifying that the survey was made in compliance with the standards. If you do use it, I would be very cautious in how you fill it out. Stating, for example, “None†in response to a particular question is an express guarantee which will not be covered by any errors and omissions insurer if it turns out to be wrong. “None observed†is better, if that is, in fact, the correct answer. Otherwise, state the facts that were observed and do not make any express statements beyond your personal knowledge; you will have no Errors and Omissions coverage otherwise.
o With regard to HUD being a federal agency (some attorneys like to invoke that fact as justification for forcing the surveyor to use the HUD certificate) … that that has nothing to do with the Surveyor's professional obligation to comply with state laws, standards and the normal standard of care.
Following is a report on what has transpired over the last two years since the 2011 standards were adopted by ALTA and NSPS and became effective on February 23, 2011. It is fairly long, so I apologize ahead of time.
I have attached a list of the suggestions that have been made so far for the next version (likely dated 2016)). As I have always said – if a suggestion is made, it gets on the list - it does not matter if I think it is a good suggestion or a bad one. So, the attached list is simply the raw input; I offer no personal comments or perspectives at this time.
There have also been a few issues that have arisen with respect to the 2011 standards that I want to alert everyone to.
Table A item 19 – Wetlands. We need to modify the language of this item to more clearly reflect what was intended. What it was TRYING to say was simply this: If someone who is qualified to delineate wetlands has been out on the property and has marked their opinion of where the wetlands are, and if the client would like the surveyor to locate those delineation marks and show them on the survey, then they should check this item. The surveyor makes no comments and offers no opinions as to whether the delineations actually represent a wetlands; he or she is simply showing the marks on the survey. In fact, the marks should be identified either on the survey or with a note as to the source (i.e., who set them, if known). It appears, however, that those persons selecting Table A item 19 somehow think the surveyor is going to miraculously turn into a wetlands biologist. That was not the intent, and very, very few surveyors would be qualified to delineate wetlands anyway. It is my suggestion that if someone checks off Item 19, the surveyor should clarify ahead of time what he or she is going to do as a result.
Table A items 6a and 6b: In 2011, ALTA and NSPS decided that the title company should provide the zoning information to the surveyor pursuant to this item. What we have found, however, is that in general title companies do not want to do this. Without going into great detail at this time as to why, after being educated on the issue, I understand their resistance. My suggestion is that if Table A item 6a or 6b is checked off, the surveyor should clarify ahead of time that the title company may not provide the information and ask the client how they would like to proceed: “Pay me to do the research?†or “Pay me to hire someone to do the research?†etc. Some surveyors are reacting by simply ignoring the item if the information is not provided. I do not see this as particularly helpful or professional; we should be part of the solution, not part of the problem, so let’s discuss it ahead of time and decide how to deal with it. To those who would say that they can ignore it because it requires that the information be provided, I would remind you that Table A items are negotiable, so some modification of the item can be made.
Section 4 – Records research: With the 2011 standards, it was agreed between ALTA and NSPS that the title company should provide copies of adjoiner descriptions to the surveyor. As with the zoning issue in Table A item 6, the title companies are sometimes resistant to providing those adjoiner deeds. Again, I understand why, but am not going to go into that here. The bottom line, however, is that in virtually every state, surveyors are responsible for pulling adjoiner deeds and reviewing those deeds - indicating gaps, overlaps or contiguity. The fact that we were foisting the responsibility of pulling those deeds off on the title company was merely going to be handy for the surveyor; it ultimately cannot replace state laws or administrative rules. So if the title company does not provide them, it does not relieve surveyors of doing the research themselves. And again, this is not a violation of the item; Table A items are negotiable, so address this issue up front and request compensation for the additional work if appropriate (remembering that you actually have to do it anyway under your state’s laws).
Section 7 Certification: To the credit of the surveying community, virtually every private lender in the U.S. has acquiesced to using (only and unaltered) the Section 7 certification. The only entities I am personally aware of that are continuing to resist this and insist on their own are HUD Multi-family, Fannie Mae and some state housing authorities that are somehow connected with HUD. My suggestions on how to deal with this issue are these:
o Some of HUD offices are flexible and will actually allow the surveyor to use only the ALTA/ACSM Section 7 certificate. I know this from personal experience and others (including at least one HUD employee) has told me the same thing. Alternatively, however, some HUD offices are not flexible.
o There are no regulations that can be used to tell surveyors they ‘must’ use any certificate - other than as may be mandated by a state board or statute. Surveyors are licensed by their respective states and must comply with their state's laws and the normal standard of care.
o In some states, the state law specifically invokes the ALTA/ACSM Standards. In all cases, I personally believe that the normal standard of care would require that the surveyor follow a current, nationally-recognized standard and accompanying certification.
o Having said all of that … the ALTA/ACSM Standards MANDATE the Section 7 certification and the surveyor MUST use it on the face of the survey. So, how does a surveyor deal with an obstinate attorney?
o The surveyor could provide the HUD certificate on a separate sheet (company letterhead, for example), that cross-references to the survey. That way HUD can have their certificate, but the survey will show the Section 7 certification as mandated by the standards. In my experience, this is often grudgingly accepted.
o Another option is for the surveyor to go ahead and put the HUD certificate on the face of the survey - but then any reference to the 2011 ALTA/ACSM Standards must be removed from the plat/map because it no longer complies with these copyrighted standards. That is usually not acceptable for several reasons.
o I do know from personal experience if the surveyor simply refuses to use the certificate - citing state law, common law and/or the normal standard of care - there will be moaning and groaning and threats, but the loan will likely close. (Which only proves what surveyors already know – the Section 7 certificate adequately protects HUD).
o The HUD "Surveyor's Report" (which is also part of a HUD survey) is, if one takes the time to read the standards, and if the appropriate Table A items were selected, completely and inexplicably redundant, given that the Section 7 certification has the surveyor certifying that the survey was made in compliance with the standards. If you do use it, I would be very cautious in how you fill it out. Stating, for example, “None†in response to a particular question is an express guarantee which will not be covered by any errors and omissions insurer if it turns out to be wrong. “None observed†is better, if that is, in fact, the correct answer. Otherwise, state the facts that were observed and do not make any express statements beyond your personal knowledge; you will have no Errors and Omissions coverage otherwise.
o With regard to HUD being a federal agency (some attorneys like to invoke that fact as justification for forcing the surveyor to use the HUD certificate) … that that has nothing to do with the Surveyor's professional obligation to comply with state laws, standards and the normal standard of care.