The Land Behind the Listing

Surveys, Easements, and Title Issues Every New Agent Should Understand Understanding common land and title concerns can help new agents avoid delays, confidently, answer client questions, and keep transactions on track. One of the most surprising aspects for many new real estate agents is how much of the profession involves understanding land—not just houses. New agents quickly learn that issues such as surveys, easements, encroachments, and legal descriptions can delay closings, raise lender concerns, or create complications for buyers after they move in. While these subjects may initially seem complex, having a basic awareness of them allows agents to guide clients more confidently and avoid unpleasant surprises during a transaction. Why Surveys Matter in a Real Estate Transaction? A property survey is a professional drawing that shows the exact boundaries of a parcel of land. It also shows improvements located on the property, such as buildings, fences, roadways, and other structures. Surveys frequently reveal issues that are not readily apparent when simply walking through a property. A survey can identify: •  Fences built across property lines •  Easements impacting the property •  Buildings or structures too close to boundaries •  Setback violations •  Utility access areas Lenders typically rely on surveys to confirm that the property matches its legal description and that no boundary issues exist that could affect the property's value as collateral. If a survey is unavailable, a title company may include a survey exception in the title commitment stating that it will not ensure against issues a survey would have identified. A title commitment specifies the terms under which the title company is willing to issue title insurance and highlights items that are not covered by the policy. Not all surveys are the same, and new agents should understand the difference between the two most common types. ALTA Surveys ALTA surveys are comprehensive surveys used primarily in commercial real estate transactions. They follow strict standards established by the American Land Title Association and provide detailed information about: •  Property boundaries •  Improvements •  Easements •  Access points Residential Surveys Most residential transactions rely on a standard boundary survey, which confirms property lines and identifies major improvements such as homes, fences, and driveways. While residential surveys provide less detail than ALTA surveys, they are still extremely useful in identifying potential boundary or encroachment issues. When are surveys not needed? Lenders frequently request a property survey, but in some situations a new survey may not be necessary. Cash Purchases When a buyer pays with cash, no lender is involved. Because surveys are typically required by lenders, some cash buyers choose not to order one. I highly suggest the buyer gets one to confirm the boundaries and look for encroachments. Condominium Purchases Surveys are often unnecessary for condominium units because ownership usually only applies to the interior of the unit. Existing Surveys In some circumstances, an existing survey can be reused. This often occurs during refinances or recent purchases. The owner may be asked to sign a survey affidavit confirming that no improvements or changes to the property boundaries have occurred since the survey was completed. A title company may issue a title policy with a survey exception, meaning the policy does not cover issues that a survey might reveal, such as encroachments or boundary disputes. For this reason, many agents recommend obtaining a survey even when it is not required to prevent potential problems later. When Encroachments Become a Closing Issue. Most residential transactions rely on boundary surveys, which confirm property lines and identify major improvements. One issue that surveys frequently reveal is an encroachment—when a structure or improvement extends onto a neighboring property. Examples of encroachments include: •  Fences built over property lines •  Driveways extending onto nearby lots •  Buildings or additions crossing property boundaries •  Pools or decks partially located on adjacent land Encroachments can lead to disputes between property owners and may also create concerns for lenders. If an encroachment significantly impacts the property or creates a potential legal issue, a lender may refuse to fund the loan until the situation is resolved. A portion of another person's land may be legally used for a certain purpose due to an easement. Although the property owner retains ownership of the land, the easement grants another party limited rights to use that area. Two important terms are often used when discussing easements: •  Dominant Tenement The property that benefits from the easement. •  Servient Tenement The property that must allow the easement use. Several types of easements commonly appear in real estate transactions. Appurtenant Easement An appurtenant easement benefits another parcel of land. A common example is a driveway easement allowing one property owner to cross a neighboring property to reach a road. These easements typically transfer when the property is sold. Easement in Gross An easement in gross benefits an individual or organization rather than another parcel of property. Utility companies frequently hold these easements. Utility Easements Utility easements enable businesses to set up and maintain infrastructure like: •  Electric lines •  Sewer lines •  Water lines •  Cable and internet service Solar Easements Solar easements protect access to sunlight, often for solar panels, by preventing neighboring structures from blocking the sun. Conservation Easements Conservation easements preserve land in its natural state or protect environmentally sensitive areas by limiting certain types of development. Not all easements are created through written documents. An easement by necessity may occur when a property becomes landlocked and must cross another parcel to reach a public road. A prescriptive easement can develop when someone openly and continuously uses another person’s land for a long period without permission. These situations are less common in residential transactions, but they can occur. Easements may terminate in several ways, including: •  The easement holder abandons the easement •  A written release of the easement is recorded •  The easement expires after a set period of time •  The easement is misused beyond its intended purpose •  Ownership of both properties merges under one owner Another concept new agents should understand is the legal description of a property. A street address indicates where a property is located, but it does not legally establish ownership. Instead, real estate is identified through its legal description. The three most common methods include: •  Metes and Bounds-Uses directions and distances to describe property boundaries. •  Township and Range-Uses the Public Land Survey System to identify land using township and range numbers. •  Plat Descriptions-Identify properties based on recorded subdivision maps. These legal descriptions appear in deeds and other official property records. In some refinancing transactions, a previous survey may be used instead of ordering a new one. To use an existing survey, the closing agent may request a survey affidavit confirming that no changes have been made to the property boundaries. An older survey may still be acceptable if there have been no improvements, encroachments, or new easements. Agent Tip A survey shows where the land is. An easement shows who can use it. The title shows who owns it.