If a new survey is not obtained prior to closing, the title company makes an “exception” on the homeowner’s policy for survey coverage. Meaning, they do not provide survey coverage to the purchaser. However, the lender policy does include full survey coverage for themselves. So if the title insurance excludes protection against Survey matters (boundaries, access rights, building limits), who is responsible for these if a problem arises after you purchase the property? YOU!
These are the standard exceptions:
● Survey matters
● Taxes or assessments
● Rights or claims of parties in possession not shown by public record
● Mechanic’s liens not shown by public record
Without a survey, the buyer has no protection against the forced removal of an encroachment, or the neighbor claiming increased boundary rights, etc. Effectively the risk has been passed to YOU the buyer.
Why did this change happen? Simply to speed up the process. So this small change in the insurance policy accelerates the process to the benefit of everyone – except the buyer!
Notice: If a buyer doesn’t have a new survey done prior to closing on a property, any easement, encroachment, set-back violation, or boundary dispute that may arise, will not be covered under the homeowner’s title insurance policy.