Some question the value of a survey when it involves commercial real estate, but the right survey can be invaluable. It is also recommended not to rely on an existing survey if it does not reflect all existing improvements and easements, is blurry or damaged. Surveys address specific requirements of a commercial transaction, and are a necessary supplement to title work and other lender requirements.
Title agencies and lenders typically require a survey to have:
- Surveyor’s name, registered professional land surveyor #, signature and seal
- Scale indicator (for measurements)
- North arrow
- Legal description
3 types of surveys
Here are three that are commonly used:
As-built: This is a basic survey showing a new building’s plans and placement on the land.
Boundary or land: This identifies the actual property lines, may not indicate improvements or existing structures.
American Land Title Association (ALTA): The most comprehensive of the three, it meets ALTA’s standards. It details all the above and improvements and also includes easements and access information that title agencies need.
An ALTA survey is essential option.
Why surveys are essential
Title insurance does not provide the entire picture of ownership and restrictions relating to commercial property. A current survey shows the exact placement of boundary lines and easements, setbacks and restrictions, for example.
While photos are valuable, a thorough survey provides a complete picture with analysis.
Information vital to negotiation
A survey and a title policy together give the buyer peace of mind knowing they understand any issues relating to title, easements, boundaries and restrictions. A survey also can identify potential issues and sticking points that the buyer and seller must resolve before a deal goes through.