A survey of the property marks the corners and sets out the boundary lines of the property. It also shows easements, utility pipes, fences, walls and other potential encroachments, which may affect the property or the dwelling. A survey will also show whether driveways are located completely within the boundary lines of the property. A survey will show whether the structures on the property encroach upon building lines or neighboring properties.
Most lenders no longer require a survey to be purchased as a part of the loan transaction. The reason that lenders no longer require surveys is that the lender’s title insurance policy now covers any risks that a survey would have disclosed, even without the survey. This is not true of the owner’s title insurance. The enhanced owner’s policy does provide some survey coverage but is subject to a deductible and a maximum loss limit of $25,000. With a survey, there are no limits on coverage other than the policy limit.
Often, a purchaser may think that a title exam would reveal any problems and a survey is just redundant. This is not true. For example, a title exam may show the existence of a sewer easement, but it would not show that the easement runs directly through the house. Also, title examinations do not reveal fences, walls, and improvements that might sit on or over the property line or violations of building lines or encroachments onto neighboring property.
Generally, a purchaser buying property should always request a survey on the property being purchased. Knowing the property lines will assist a purchaser in making sure future improvements like fences are located on the purchaser’s property. If a survey is obtained as part of the purchase and later, a next-door neighbor puts up a fence on the purchaser’s property, then the Owner’s title policy will cover it because the property lines were conclusively established by the survey at closing. It is to the buyer’s benefit to find out about problems before the property closes when it is still the seller’s problem rather than after closing when the seller no longer has an interest in the property.