What Are ALTA/NSPS Land Title Surveys?
Title Insurers have specific needs related to title insurance matters, and when asked to provide an insurance policy The American Land Title Association (ALTA) and the National Society of Professional Surveyors (NSPS), a set of standards that governs land surveys as a reference for title professionals, lenders and the issuance of title insurance coverage. That standard is called an ALTA Survey. The ALTA Survey is a detailed land parcel map, showing all existing improvements of the property, utilities, and significant observations within the insured estate. The survey also details the licensed surveyor’s findings concerning the property boundaries and how they relate to the title.
The Survey delineates or makes note of all easements and exceptions cited within the title commitment for insurance of the secured party. The survey may also show zoning and flood zone restrictions or areas indicating potential future use of the property. The ALTA survey is a combination of a boundary survey, title survey, and a location survey. The ALTA standards governing the content of all ALTA surveys and are denoted in the Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys, as adopted by American Land Title Association and National Society of Professional Surveyors.
When Might You Need an ALTA Survey?
Commercial Real Estate Transaction
Title insurance companies and/or lenders might require an ALTA Survey to be performed as part of transactional due diligence for a commercial real estate purchase or refinancing. Some of the boundary-related liabilities of commercial purchases include boundary line disputes, encroachments, or other conditions and/or circumstances such as easements or claims of easements not found in public records. Having a better understanding of these delineations prior to purchase can give the stakeholder critical information that informs their decision. An ALTA survey can reveal the existence of critical discrepancies that would need to be resolved, and helps lower risk for future owners. If you’re selling a piece of commercial property, an ALTA survey provides a record for comparison against the buyer’s survey.
Vacant Land Purchase
An ALTA survey may also be required for a vacant land purchase for further development. While a simple boundary survey might be the minimum requirement in this case, often vacant land has either never been surveyed or was surveyed long ago when surveying technologies were less accurate. This means there could be boundary, ownership or encroachment issues that are unknown at the time of purchase. Imagine developing an entire property, only to find out later that an entire portion of the development is outside the legal boundaries of your property. An ALTA survey avoids these headaches and provides protection against boundary line disputes.
ALTA Surveys and Zoning Reports
In addition to providing boundary resolutions, lenders generally require a property to follow zoning ordinances and compliance before they will issue a loan. Certain states, such as New Jersey, make zoning reports compulsory before a commercial property can be purchased. In the event that a property becomes legally nonconforming, commonly referred to as “grandfathered,” lenders require a certain damage and reconstruction threshold percentage to minimize the risk to their investment. Zoning liability can be especially critical for longer-term occupants and investors, either if a jurisdiction or zoning law changes, or if specific property designation changes.
With zoning codes and commercial real estate development ordinances changing rapidly, a zoning report provides assurance to the stakeholders that the current and future use of the property will comply with local laws, as currently outlined. More importantly, it also protects the property owner against future liabilities based on compliance, municipal, or neighborhood changes. Executing these reports in a timely manner has become even more important due to new changes in how this information is used for ALTA surveys. In the adaption of the 2016 ALTA/NSPS minimum standard detail requirements, the reporting of zoning information on the survey changed, specifically in the Table A Optional Survey Responsibilities and Specifications items 6(a) (zoning classifications) and 6(b) (zoning setback requirements).
When item 6(a) is included in an ALTA Survey, the surveyor will list the current zoning classification, setback requirements, the height and floor space area restrictions and parking requirements on the face of the survey. But for a surveyor to do this, they must be provided with a zoning report or zoning letter from the client. Previously, it was left open to interpretation where this information came from.
When item 6(b) is included in an ALTA Survey, the surveyor will graphically depict the building setback requirements, if the zoning setback requirements are set forth in a zoning report or letter provided to the surveyor by the client, and those requirements do not require an interpretation by the surveyor.
New ALTA survey changes requiring zoning reports directly from clients requesting the survey will encourage synergy between these two due diligence components from your consultant. As a result, ALTA land surveys are often ordered together with zoning reports. Obtaining all of this information from the same trusted, knowledgeable professional consultants provides meticulous, streamlined due diligence assessments, while avoiding delays and unnecessary additional costs along the way.
Download a copy of the Partner Engineering and Science ALTA Survey Handbook.
The ALTA standard changed in 2021. For updated information, please visit the ALTA/NSPS overview page.