Property Surveys in a Residential Real Estate Purchase
Q&A Session with Real Estate Attorney Steven Leunes, from Astoria, Queens, NY
What is a Survey?
A survey is a drawing that shows the boundaries of the property lot and the exterior dimensions of the buildings and other structures. It serves various purposes but in a residential transaction it is used to ascertain that the purchaser is getting the property that he or she bargained for, without encroachments from neighbors. It also shows structures on the lot so the attorneys can verify the legal status of these structures (such as garages, decks, extensions, etc.). A survey is a sketch done by a licensed surveyor. Here is an example.
So summarizing, why does the buyer attorney order a survey in a residential transaction?
- To determine the boundaries of the lot and size of structures on it.
- To verify what structures are on the property and their legality.
When do you order a survey, how much does it cost and who pays for it?
Because the survey involves the work done by the surveyor it is a non refundable, prepaid closing cost. Meaning, that if the transaction does not close or the buyers does not get approved for their mortgage, they would not get a refund for the cost of the survey. So as an attorney, we let the client decide if they want to order it early in the transaction (before the mortgage is approved) or after they get approved. If they do it at the end, they need to understand that, depending on how busy the surveyors are, this can take 1 to 2 weeks, which could delay the closing. The costs varies between $500-$2,000, and it depends on the County, the size of the lot and other factors.
In my real estate practice as a broker, I noticed that sometimes there is an older survey supplied by the seller and that the attorneys use this instead of ordering a new survey, and just have this survey inspected. Can you explain how this works?
Yes, this can save some money to the buyers because the survey inspection only costs $75-$150 which is less than ordering a new survey. But there is a caveat here, when you take this older survey (anything that is over 6 months old is considered an old survey), and the title company orders the survey inspection to see if there has been any changes on the property after the survey was done, and that they are not of any legal concern, then the title company will not insure the older survey information, limits and measurements, because they did not order it themselves. In other words, the title company does not guarantee this survey and they are not liable if there is a future claim as to the limits of the property.
What is a survey reading?
This is merely a writeup that describes the survey in words, the measurements and any structures or issues of concern, or encroachments, to make them obvious to the attorneys so they can address them.
I am not a lawyer but I noticed that different attorneys have different criteria or flexibility regarding encroachments, neighbor fences and discrepancies between what the survey shows and what the property really measures. Can you comment on what are the most common criteria that you see attorneys apply in your regular practice?
The usual norm for an encroachment of a fence to be acceptable is 1 foot or less. It is then considered minimal and most attorneys would accept this. Sometimes attorneys will want a maximum discrepancy of 6”, and this is rather demanding and impractical, because in Queens and many other markets, homeowners do not always check their surveys when they build a fence and a 6” mistake one way or the other is very common. Most title companies will still insure the home buyer if the discrepancies are 1 foot or less.
What happens if the survey shows that there is a structure or fence that is encroaching 1.5 ´, for example, over the acceptable limit, and perhaps the seller did not even know or care about this?
This is what is called being “out of possession”, and therefore the title company will not insure this particular issue. The most current solution is to get a Boundary Agreement signed by the neighbor who is encroaching, which is basically a notarized affidavit by him or her stating that they do not legally claim ownership or rights of any kind over this piece of land that really belongs to the seller. This means that in the future, when the buyer becomes owner, and may decided to sell the property, they will not have an issue because this boundary agreement has been recorded. In an ideal world the seller could ask the neighbor to move the fence but this often leads to discussions about who pays what and this is when things get complicated. The Boundary Agreement is the way to go, because you don´t have to move any physical structure, and just get this signed by the encroaching neighbor. This affidavit protects the new owner even better than moving the fence, because moving the fence again, could not be done accurately.
A technical question. What does it mean Adverse Possession as it relates to this fence issues?
Adverse Possession occurs when a neighbor has been using part of the subject property for over a period of ten years or more in NY. This could be done by having the fence too far over, or by them using your property as a driveway or walkway to get to part of their property, etc. This neighbor by virtue of Adverse Possession can then claim to have a right over this part of the subject property.
What is a difference between an architectural survey and the regular property survey ordered during the purchase process?
The architectural survey is a specific survey that the homeowners will get when they are dealing with an architect for the purpose of designing a new structure, like a garage or a deck, and having architecs do their calculations for changing or drafting plans that then have to be submitted and approved by the Buildings Department. Those architectural surveys cannot be used for the sale of the property. They would have to be converted to a title survey, by a licensed surveyor who will guarantee it. The title survey is what we attorneys order during a purchase transaction for the purposes already mentioned.
What do you do with the survey that you get at closing?
This is usually given to them by their attorney with all other closing papers. They should keep this in a safe place, as they may want to give it to their lawyer when they intend to sell the property in the future.
Disclaimer by Steve Leunes: “This meeting was designed to illustrate what a title survey is but clients should not take this as legal advise and should consult with their own attorney if they have questions or concerns about a survey”.