Hay Legal Group PLLC

“What the Heck Is That Survey Deletion Coverage?”

First, let’s just say that referring to it as “Survey Deletion Coverage” begins the confusion. Instead it really is a “Survey Exception Amendment.”

In your title commitment, and ultimately your title policy, there is a general exception to your coverage that reads “Any discrepancies, conflicts, shortages in area or boundary lines, encroachments or protrusions, or overlapping improvements.”

What does that mean? Simply you have no coverage for those items in your title insurance.

However, if requested, the exception can be amended to take out much of the verbiage, leaving the exception to read “Shortages in Area.” This means that an accurate survey was submitted to the title company and approved for this purpose (and with regard to Owner’s Title Policies, the mandated cost for endorsement is paid).

At this point your title insurance will offer you coverage resulting from discrepancies, conflicts in boundary lines, encroachments, and protrusions or overlapping of improvements not shown on your survey and not known at the time of closing. However, it is important to understand that any items found during the review of the survey would become additional exceptions to coverage in your title insurance policy.

In an effort to 1) clarify whether the exception amendment is desired, and 2) who pays for it, TREC amended verbiage in TREC Contracts with regard to this.

Understanding your choices:
Under the TITLE POLICY AND SURVEY provision paragraph of the contract you’ll find a first choice (see directly below). Essentially parties tell us whether they want the amended coverage and who is paying for it.

Excerpt from a TREC contract:
The standard printed exception as to discrepancies, conflicts, shortages in area or boundary lines, encroachments or protrusions, or overlapping improvements: ° (i) will not be amended or deleted from the title policy; ° (ii) will be amended to read, “shortages in area” at the expense of ° Buyer ° Seller.

The other BIGGIE with regard to surveys was changed several years ago in an effort to clarify performance regarding deliverance of a Seller’s prior survey. Here parties tell us what expectations are for performance and who pays. Excerpt from a

TREC contract:
C. SURVEY: The survey must be made by a registered professional land surveyor acceptable to the Title Company and Buyer’s lender(s). (Check one box only)

° (1) Within days after the effective date of this contract, Seller shall furnish to Buyer and Title Company Seller’s existing survey of the Property and a Residential Real Property Affidavit promulgated by the Texas Department of Insurance (T-47 Affidavit). If Seller fails to furnish the existing survey or affidavit within the time prescribed, Buyer shall obtain a new survey at Seller’s expense no later than 3 days prior to Closing Date. If the existing survey or affidavit is not acceptable to Title Company or Buyer’s lender(s), Buyer shall obtain a new survey at °Seller’s °Buyer’s expense no later than 3 days prior to Closing Date.
° (2) Within days after the effective date of this contract, Buyer shall obtain a new survey at Buyer’s expense. Buyer is deemed to receive the survey on the date of actual receipt or the date specified in this paragraph, whichever is earlier.

° (3) Within __ days after the effective date of this contract, Seller, at Seller’s expense shall furnish a new survey to Buyer.

Now, after writing this I got feedback from a couple of colleague’s in the office, as I felt it was a little “dry”. They thought maybe more was needed as there was important information about T-47 Affidavit’s and more in-depth explaining of survey’s, etc.

But I say- let’s leave ‘em hanging! Tune in later for more “As The World Of Title Turns!” (Fade to music…)

Written by Kim Martinez, Escrow Officer

 

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