A survey is a vital piece of the puzzle that is obtained throughout the closing process. A buyer is typically required to obtain a survey in order to purchase real property due to their lender’s requirements. The vast majority of lender’s require a Florida Form 9-06 Endorsement (also known as a “Clean Florida Form 9”) with their lender’s title insurance policy. The Florida Form 9-06 Endorsement insures against violations of restrictions; encroachments over easements, building lines, or property, and damage by reason of mineral development. In order for a Clean Florida Form 9 to be issued to the lender, a survey with minimal or no encroachments is required, which is why a survey is normally required on all financed transactions. It is the closing agent’s duty to review the survey on their client’s behalf to ensure the lack of any major encroachments. If there are minimal encroachments, such as: the driveway in an easement, an AC pad in an easement, a fence meandering over a building setback line, etc., a Clean Florida Form 9 is likely still able to be provided to the lender, as those encroachments are viewed as de minimus and low risk to the underwriter.
It is important to mention that the Florida Form 9-06 Endorsement is utilized solely for the lender’s title insurance policy and does not provide the buyer any coverage for their Owner’s Title Insurance Policy. Depending on what type of encroachment the survey depicts, the underwriter may provide a Clean Florida Form 9 to the lender and a Florida Form 9.2 Endorsement to the buyer. A Florida Form 9.2 Endorsement provides affirmative coverage to the buyer against loss incurred as a result of the survey encroachment. The explicit purpose of the Florida Form 9.2 Endorsement is to protect the buyer (but not future purchasers) against any loss or damage pertaining to the forced removal of the encroachment. That being said, the Florida Form 9.2 Endorsement will allow the buyer to close and protect their interests while owning the property, but it does not resolve the issue. When the buyer sells this property in the future, a prospective buyer can require the owner to remedy the survey defect, as opposed to obtaining a 9.2 Endorsement. The underwriter has to allow closing to occur with a Florida Form 9.2 Endorsement and the buyer has to approve moving forward with the aforementioned endorsement. A 9.2 endorsement is typically utilized when the encroachment has been on the property for a very long time, never presented an issue, and the underwriter believes the risk to be minimal.
A few examples of survey encroachments that might require a 9.2 are as follows:
1) A screened pool cage encroaches into a Homeowner’s Association’s setback line by 0.1’ and the pool cage has been there for over 25 years
2) The Property encroaches into a drainage and utility easement by 0.2’
3) The carport encroaches into a drainage and utility easement
While a Florida Form 9.2 Endorsement provides a temporary fix to a buyer wanting to close on a property with a survey encroachment, it does not resolve the issue and may likely present an obstacle when selling in the future. As always, if you have any questions about surveys and the applicability of a Florida Form 9-06 or 9.2 endorsement, Berlin Patten Ebling encourages you to contact your local real estate attorney.
Mallory Moretti, Esq. email@example.com
Berlin Patten Ebling, PLLC
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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