What kind of changes might affect a plot survey? Over that time, you may have put up a new fence, added a side room or porch to the home or constructed a shed or gazebo in the back yard.
If you live by the water’s edge of a lake or river, the boundary of your land may have changed slightly. Over the years, you or your neighbors may have installed a new driveway, patio or other improvement. In some instances, utility companies may have obtained new easement rights and installed new electric poles, or you may have had new installations of sewer drains.
Although all of these items are generally perfectly fine, any one of these items could pose a potential title problem and hinder your sale. For example, if you put up a new fence and put it a couple of feet on your neighbor’s land, your neighbor could potentially require your buyer to remove the fence. Your buyer may be willing to take the risk, but it’s good to know ahead of time. But if, on the other hand, you built a side room on a part of your land on which building any improvement is prohibited, that could be a major issue for the buyer and kill your sale.
Given all of this, buyers would rather be safe and know what’s going on with the property today. If your survey was a year or two old, the closing agent and buyer might accept from you the survey along with an affidavit that there have been no changes to the property since the date of that last survey.
Using both the survey and the affidavit would give the title company (in parts of the country where this practice is accepted) comfort to insure title in the buyer’s name without raising certain title matters on the title insurance policy. If you, as the seller, lied to the title company, the title company could go after you for the error.
The same can be said with title insurance policies. A title insurance policy is a “picture” of the status of title as of the date of the policy. Things that occur after the policy date are unknown and are reflected in a new title insurance commitment. So, if you have new real estate tax liens on the property, judgments, suits, new easements or license agreements, all of these items should show up on the new title insurance commitment for the buyer to see.
For these reasons, a buyer is smart to obtain a new survey and a new title insurance policy when he or she buys a home.
Ilyce Glink is the creator of an 18-part webinar + ebook series called “The Intentional Investor: How to Be Wildly Successful in Real Estate” as well as the author of many books on real estate. She also hosts the “Real Estate Minute” on her YouTube channel. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact them at ThinkGlink.com.