Believing Miss Mildred (a true parable of shade trees, neighborly trust, and a bottomless cup of coffee)

Miss Mildred

Once upon a time, a young fresh family bought a fine old home in a fine old subdivision dotted with a veritable forest of fine old shade trees and lakes, not to mention neighbors of a similarly fine old stature.

One day, the young fresh family brought home a frisky new puppy. Nothing would do but to fence in their fine old back yard to protect their new faithful friend. Daddy James, a real estate professional, went next-door to see Miss Mildred, their fine old neighbor who had lived in the fine old neighborhood for nearly too many years to count.

Miss Mildred, aside from knowing her way around the kitchen, was a fountain of knowledge on all things important to their fine old neighborhood, including who owned what, and what went where.

In this case, the question was whether the fine old oak tree between their two properties was on the young fresh family’s side of the line, or Miss Mildred’s?  It seems that James, the real estate professional, had not procured a survey when the young fresh family purchased their fine old home.

Over an endless cup of coffee and a scrumptious piece of homemade cake, Miss Mildred opined as to how the fine old oak tree was on her side of the dividing line. Unwilling to question such an acknowledged neighborhood authority, James, the real estate professional, reckoned that their new fence should be placed on the young fresh family’s side of the tree.

Nary a word was ever spoken again on the subject until the young fresh family expanded, and the time came to move to a larger, finer new home.  Much to everyone’s surprise, the buyer’s survey revealed that the young fresh family’s fence had been installed a couple of feet inside of their actual property line!

When questioned by the buyer’s Realtor, then the closing attorney, James, the real estate professional, happily recounted the story of coffee and conversation with Miss Mildred, and insisted her assessment of the boundary line location was correct. His devotion to his future former neighbor was so staunch, in fact, that James stated emphatically and with increasing ire that the buyer’s survey was incorrect, and that was that.

With emotions at a fever pitch, the buyer’s attorney ordered his own survey of the questionable property line to check the work of the prior surveyor. Lo and behold, the lines matched to a tee.

Finally seeing the writing on the wall, James, the real estate professional, agreed that perhaps the buyer’s request to relocate the fence was reasonable, and hat in hand he trekked over to Miss Mildred’s house one last time to deliver the news. An eminently practical woman, not to mention a frugal one, Miss Mildred politely agreed that two surveyors could not possibly be wrong, and in fact perhaps it was her memory that had gotten a little fuzzy after all these years. Work soon commenced to relocate the fence, and the closing happened without further ado.

The moral of the story is that fine old neighbors can be a treasure trove of community knowledge, not to mention hospitality.  Unless, however, they are licensed surveyors, their insights on the precise location of boundary lines and other technical matters best be regarded as anecdotal, and leave the measurements and legal opinions up to the professionals.

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This information in this site is not intended to establish an attorney-client relationship, and if anything herein could be construed as legal guidance or advice, I strongly encourage you to consult with your own attorney before relying upon any such information.

All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

dunlapmoran.com

Debunking Old Myths, Installment 1: Yes, You Need A Survey With A Cash Closing

Somewhere along the line it entered the Realtor lexicon the phrase “you’re paying cash, you don’t need a survey.”

It is as if the method of payment for the property magically changes the fact that…for example…a six-foot corner of the living room encroaches into the platted side yard setback…

It is common knowledge that mortgage lenders require a survey in connection with their loan.  However, there are those Realtors and buyers who believe that on this particular subject the inverse is true when it comes to paying all cash, and the survey requirement is merely the contrivance of mortgage lenders to make buyers’ lives more difficult and expensive.

So just what exactly is a survey, and why do you need one?

The survey is “the process by which corners, boundaries, divisions, and other attributes of land are ascertained and measured.”  A surveyor is the expert who renders his or her opinion as to the location of “property and its improvements and appurtenances.”  The physical rendering of the surveyor’s work is the map of survey.

The map shows a buyer precisely what they’re purchasing in terms of the boundaries of the land, the location of improvements on and about the land, and the rights of others (if any) to use portions of the land.  How one finances the purchase of a property has no impact on the physical reality of the property, its boundaries, improvements, and any third party rights relating thereto.   

Put another way, to decline to obtain a survey is to forgo an understanding about the location of a property’s boundaries and improvements, the nature and extent of any third party rights and uses, and whether there are any collateral issues regarding these or any other matters that would impact the ownership and enjoyment of the property.

It is also important to note that unless the closing/title agent is provided with an accurate survey in advance of closing, the buyer’s title insurance policy will contain an exception to coverage for “[a]ny encroachment, encumbrance, violation, variation, or adverse circumstance affecting the [t]itle that would be disclosed by an accurate and complete land survey.“  Provision of the survey allows the title agent to insure the buyer’s property free and clear of such matters (except any adverse matters indicated on the survey map).

Practically speaking, the most typical survey-related concerns involve easements and encroachments.   

An easement “is a right given to another person or entity to use [a person’s] property.”  For instance, most modern subdivision lots have easements around the perimeter of each lot that allow utility providers access for placement and maintenance of lines and conduits, or allowing the homeowners association or others access to and from the property for maintenance and other matters.  In other cases an easement may exist to provide access to a land-locked parcel by granting ingress and egress over the subject property.

Regardless of the nature of the easement (whether specific or general), it can limit one’s ability to do what they please with their property, so it is important to know where the easement(s) is/are located, and the nature/extent of the easement(s) prior to taking title to the property.

An encroachment occurs when physical improvements (i.e., the home, patio, garage, fence, etc.) are built beyond setback or easement lines within the property, or beyond the boundary line of the property (or likewise when an adjoining property’s improvements are built into the subject property’s boundary).

Some encroachments can be resolved prior to the time of closing, i.e., through physical removal, or through the negotiation of the appropriate agreement, etc.  In some specific cases an endorsement can be added to the final title insurance policy to provide the buyer with protection in the event of a later challenge to an encroachment that is not (or cannot be) removed prior to closing.  Some encroachments are of enough concern that the client may not end up purchasing the property at all.

Of course, the buyer would never have any of these options if a survey revealing the issue was not procured in the first place.

From the selling agent’s perspective, keep in mind that the FAR-BAR contracts specify the time period for acquisition of the survey (Section 9d), and the mechanism for identifying issues of concern and extending the closing date as necessary based on the survey results (Section 18B).  As with the rest of the contract form, it is important to be familiar with these provisions so you are not caught unaware when a survey-related issue comes to light.

From the listing agent’s perspective, always make it a point to ask sellers for a copy of the latest and most accurate survey of the property that they have available, and share this early on with the selling agent, or even attach to the MLS file so the information is readily available to potential buyers and their closing agent.  Also be prepared to discuss and have your sellers disclose any known survey-related issues so they can be addressed as soon as possible and hopefully not delay or hinder the closing.

As always, I encourage you to seek the advice and guidance of an experienced real estate attorney when it comes to understanding and interpreting surveys and their contents, and when having to protect clients’ rights in the event of survey-related issues or concerns.  It goes without saying that we would be delighted to provide such assistance when the time comes.

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This information in this site is not intended to establish an attorney-client relationship, and if anything herein could be construed as legal guidance or advice, I strongly encourage you to consult with your own attorney before relying upon any such information.

 All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

dunlapmoran.com