In the past, the Lender on every sales transaction required surveys. However, most lenders no longer require surveys. Does this mean that the Buyer should not request a survey? Here are few reasons why you SHOULD request a survey
A survey of the property:
- Marks the corners and sets out the boundary lines of the property
- Shows easements, utility pipes, fences, walls and other potential encroachments which may affect the property or dwelling
- Shows whether driveways are located completely within the boundary lines of the property
- Shows whether the structures on the property encroach upon building lines or neighboring properties
Most Lenders no longer require a survey to be purchased as a part of the loan transaction as their risk from matters disclosed by a survey are now covered under the Lenders Title Insurance Policy. Because Lenders no longer require a survey, many purchasers do not think they need a survey.
The reason that lenders no longer require surveys is due to the fact that the lender’s title insurance policy now insures over survey risks to the Lender; therefore any problem a survey would have shown is covered in a lender’s policy. This is NOT true of the owner’s title insurance. The enhanced owner’s policy does provide some survey coverage but is subject to a deductible and a maximum loss limit of $25,000. With a survey, there are no limits on coverage.
Often a purchaser may think that a title exam would reveal any problems and a survey is just redundant. This is not true! For example, a title exam may show the existence of a sewer easement, but it would not show that the easement runs directly through the house. Also, title examinations do not reveal fences, walls and improvements that might sit on or over the property line or violations of building lines or encroachments onto neighboring property.
Generally, a purchaser buying property should always request a survey on the property being purchased. It is to the buyer’s benefit to find out problems before the property closes when it is still the seller’s problem rather than after closing when the seller no longer has an interest in the property.