When is it Appropriate to Use a Prior Survey in Place of a New Survey?
The short answer to this question is that “it depends” on several factors. The first factor is almost always “cost.” Since a new survey is relatively inexpensive (in the range of $300 to $500, but sometimes more), particularly when considered against the purchase price of the property being acquired ($100’s of thousands of dollars, millions even), this consideration should be moved to a place much further down on the list.
What Factor Should Be Given the Greatest Weight?
Of greater concern should be the age of the prior survey and whether all of the improvements and title exceptions have been plotted on the prior survey (for clarity, let’s refer to a prior survey as the “prior”). A survey depicts the exact boundary of what is being purchased; shows easements for utilities such as water, sewer, power lines, etc.; identifies overlaps, gaps, gores, or encroachments that may exist; and can identify possible boundary disputes. Many times a prior is so old that it does not show all of the improvements on the property. For example, since the date of the prior, have any of the following been added to the property:
- Hot Tub
- Covered Porch
- An Addition
- House Extension
- Or some other structure of similar import
Mind you, this list is not exhaustive, but only a representative sampling of “additions” that will disqualify a prior from being approved for use by the title insurance underwriter.
What Do You Mean by “Disqualified for Use?
One of the essential purposes of a survey is to:
1) Delete the standard survey exceptions from the title insurance policies (loan and owner’s); and
2) To issue a Florida Form 9 Endorsement to the Loan Policy (“FF9”).
Virtually all institutional lenders (that is, lenders that adhere to Fannie Mae and/or Freddie Mac guidelines), require the FF9 endorsement and the deletion of the standard survey exceptions. Florida title insurance regulations require a survey acceptable to the underwriter to issue the endorsement and delete the survey exceptions. A prior that does not reflect all improvements on the property will not be an acceptable survey.
The Surveyor is Accountable For The Accuracy of the Prior, Correct?
No. Since the prior is not certified to the new buyer (or the new buyer’s lender), if there is an issue with the accuracy or completeness of the prior, the buyer has no legal right to hold the surveyor accountable. Only those persons to whom the prior is certified have such rights. Occasionally a lender will insist that the prior be certified to it (more often in commercial transactions, and less often in residential transactions).
Has the Prior Been Prepared with the Benefit of a Title Commitment or Title Report?
A crucial consideration for using or rejecting a prior is whether it was prepared with the benefit of a title commitment or report. In my opinion, this is an indispensable requirement for any survey. To accept a survey (whether prior or new) that has been prepared without the benefit of a title commitment or report is dangerous. The surveyor uses the title commitment to depict on the face of the survey all title exceptions (i.e., easements, set back lines, restrictions, rights-of-way, etc.) that are capable of being plotted. Leaving exceptions off a survey can result in an undisclosed encroachment violation. If the surveyor is not provided with the title commitment and is unaware of the specific title exceptions, the surveyor is going to include a disclaimer on the face of the survey.
Don’t let cost be the deciding factor when evaluating the prudence of using a prior versus obtaining a new survey. Instead, give due consideration to the other factors mentioned here – remember, the point of the survey is to determine whether there are any issues affecting the property that need to be corrected before closing (when the burden is on the seller) rather than after closing (when the burden will be on the buyer).
* for purposes of this blog, a “prior survey” is a boundary survey of the subject property that has already been prepared or utilized by the seller and is in existence prior to the date the buyer(s) and the seller(s) sign a contract.
Should you have questions or concerns regarding using a prior survey, we urge you to contact or consult your local real estate attorney for additional guidance.