Streamlining Property Surveys – A Look at the ALTA/ACSM Table A Requirements
Written by: Andrew Royce
The property survey is typically a lead-time item in commercial real estate loans since it can often take several weeks to complete. It is therefore crucial that the surveyor be told at the start of the project exactly what the lender will be requiring for the survey. This is usually accomplished by reference to the ALTA/ACSM Table A Optional Survey Responsibilities and Specifications, which supplement the 2011 Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys as adopted by the American Land Title Association and the National Society of Professional Surveyors. The forms can be found here.
Table A includes 22 optional items which the surveyor can be asked to depict on the survey – some are simple and won’t typically involve extra time or cost (such as Item 2 – property address, and Item 3 - flood zone classification), while others may involve substantial time and additional charges (such as Item 1 - placing of monuments at boundary corners, Item 5 – vertical relief with contour intervals, and Item 11(b) – evidence of utilities obtained from utility companies).
Many lenders have a list of the specific Table A items they require, which can then be passed on to the surveyor. Other lenders may not; in such cases, the borrower should take the initiative to make sure that the Table A items which the surveyor will undertake will fully satisfy the lender and its attorney. No one wants to find out later, when the survey is produced a few days before the closing, that the closing must be postponed because the surveyor has to perform additional work of which it wasn’t initially made aware.
When the Table A requirements were last revised in 2011, some seeds of confusion were sown. Item 6 had always required the surveyor to specify building setback, height, and floor space area restrictions disclosed by applicable zoning or building codes. In 2011 the words “as disclosed by applicable zoning or building codes” were replaced with the words “as provided by the insurer,” evidently because some surveyors thought it was inappropriate for them to review the applicable zoning or building codes. Unfortunately, the insurer (meaning the title insurer) often will not have the pertinent zoning information. While some surveyors may still be persuaded to obtain the zoning information themselves, others may insist that the information be provided to them. In such situations, the borrower may need to either have its attorney provide the information to the surveyor or engage a third party zoning analysis company to perform a zoning compliance report for delivery to the surveyor (entailing, in either case, additional expense).
Another source of occasional confusion is Item 19, which was added in 2011, and calls for “location of wetland areas as delineated by appropriate authorities.” Again, some surveyors may consider it outside their purview to obtain the necessary wetlands maps or materials from the applicable governmental entities. In such cases, the borrower may need to engage a third party wetlands consultant to obtain the necessary materials and deliver them to the surveyor (resulting in additional expense).
To sum up, the lender, the borrower and the surveyor should all agree as early as possible on the specific Table A items to be depicted on the property survey. If Item 6 (zoning) and/or Item 10 (wetlands) are to be included, and if the surveyor will not obtain the necessary underlying information, then an alternate source for such information will have to be established. Settling these matters upfront should prevent delays in closing the loan.