My New Blog

When I first began in real estate over 30 years ago(that's the equivalent of 120 in REALTOR years) it was customary business practice for us agents to recommend a survey for full title insurance coverage.  Our Boone and Blowing Rock North Carolina real estate market was primarily a rural market where homes or land had not been surveyed for many years or had been out-parceled over time. Our 'broker joke' at that time regarding surveys was a reference to statements we had seen in some old survey descriptions in the register of deeds..."Beginning at an old chestnut tree which is no longer there.....".

During my early years in real estate it was common for buyers, with the encouragement of real estate brokers and their closing attorneys, to get new surveys with the purchase of real estate because (1) they could not get full title insurance coverage with out a survey and (2) the mortgage lender required a survey in order to get full title insurance. 

Proof of the house placement and other improvements on the lot seemed standard operating procedure because it was important to know if all the improvements were actually ON the lot and to verify there were no encroachments onto someone else's property and that no neighbor's improvement encroached on the property being mortgaged.

Makes sense, right?  That was until about ten years ago when banks no longer required a survey, particularly if it was a platted subdivision. 

A buyer could still get title insurance without a survey, but the policy would state the coverage excludes any matters that would be revealed by a survey of the property. 

Some of those involved with the real estate closing(the bank, the buyer) came to believe paying for a survey was wasted money since the house was built in a platted subdivision.  

There have been more encroachments exposed in my transactions during my last ten years in the real estate business than in my previous twenty years combined and many of those involved recently built homes, driveways, additions in subdivisions that were not old.

I was under the illusion many of those old encroachments and survey issues had worked themselves out with the turnover of properties in our area over time as situations were revealed and corrected through re-sales of property.

Wrong.

Just because it is a platted subdivision does not mean the house, driveway, fence, pool, landscaping, garage were placed within the lot boundaries and within the setbacks. 

There are horror stories in our area where the house was built partially or ENTIRELY on someone else's lot!  Sometimes it becomes the owner's nightmare when they have to buy the adjacent lot in order to close on the contract on their home - and they have to come to the closing table with money in order to sell the house. Or, the seller has to pay the next door neighbor in order for the neighbor to agree to create a new boundary line which eliminates the encroachment. Sometimes it is the bank's nightmare when they foreclose on the lot they thought they had a recently-built mortgaged house on and it turns out the house was on the next door lot and that next door lot was NOT included as the collateral on the mortgage. 

The list of causes for these nightmares run from the builder only taking the owners' directions as to where the owner thought their lot lines were located to the health department perking out the wrong lot because the owner or agent or builder prepped the wrong lot for the perk test. Some buyers believed a flagged line showing general representation of the boundary line was THE actual survey line when it was not THE line. And some owners would interpret someone else's fence line/landscape line/mow line as THE line, when it was not. 

A good builder uses his transit and follows the layout of the newly surveyed out property lines with irons verified and placed by the surveyor. A good surveyor can draw any setback lines on the survey of the lot to show where the house can be built. A surveyor or a good builder will flag those setbacks to show the boundaries that cannot be crossed during house placement. Some builders place their own house 'corners' using their transit and some builders have the surveyor place the house corners.

Yes, this does increase the cost of the home buying process and the house construction process, but the alternative of incorrect house placement resulting in encroachments is MUCH more expensive to remedy. 

One encroachment which is a silent time bomb and is a quagmire for the owner of a house is the INCORRECT placement of a septic tank where the tank or the drainfield is erroneously on someone else's property!  Sometimes that headache for the homeowner is not revealed until the next door neighbor starts construction or the homeowner has a septic back up and needs the tank pumped out and can't find the tank on his lot or a previously platted, but not built, street is under construction and the road crew finds a septic tank.  All of these have happened in our Boone and Blowing Rock real estate market.

There are some choices and all of them cost the home owner more money. Will the health department approve the next door neighbor having enough room to build his home and place his own septic system on the lot?  If so, the next door neighbor can ask the encroaching owner to 'pay up' to leave the septic tank in place and get a recorded easement for that or else 'you can move the system off my lot'. 

The encroaching owner now has to work with the health department to get a new permit for a septic system on their own lot where their house and all improvements are already built on that lot.  Since we live in a time of increasing regulations, getting a septic permit is not easy, especially after the house was built and possibly incorrectly placed in regards to its original approved septic permit.

That's when the cost of survey with surveyor placed irons and flagged boundary lines for all to see would seem to be money well spent upfront.  

Encroachments can happen, even in a platted subdivision.