Survey Updates and Recertifications and the NEW 2021 Minimum Standards
Transaction parties are often looking at options to save due diligence costs or expedite delivery of reports to get projects to closing. Regarding surveys, assumptions may be made that the prior surveyor should be able to simply add another party to the certification or update an existing survey without a lot of effort or cost. In most circumstances, this is not the case particularly as it relates to the recent adoption of the new 2021 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys, effective February 23, 2021. More than the timeline or the overall cost, the most important consideration is the age of the existing survey and what may be acceptable to the lender and/or the title company and what the surveyor is willing to provide.
In the case of a recertification, it is important to remember that the surveyor is being asked to extend liability to additional parties that were not involved when the survey was originally performed. Whether the surveyor is comfortable in doing so may be dictated by the date of survey, state statutes for the practice of land surveying or by their professional liability insurance carrier. The surveyor may object to the elimination of additional fieldwork especially if the survey being considered was performed to a prior version of the Minimum Standards. A surveyor is a licensed registered professional and if he/she feels that what is being asked to provide might jeopardize that license or their professional standards, they certainly have the right to say no to the request.
When an update to survey is requested, the scope of services can greatly vary and typically depends on the date of the existing survey. If the existing survey was NOT performed to the most current Minimum Standard Details, the surveyor must reconcile it to the current requirements as there have been some modifications and deletion of definitions within the Optional Table A Items in the 2021 Standards.
Fieldwork will need to be performed to verify any changes to the property or to adjoining properties that may cause encroachments. There are also some additional fieldwork and data reporting responsibilities in the new standards. Typically, the title work is updated, and the surveyor will need to revise the survey accordingly. The cost of an update can vary depending on what may be involved even to the extent that the surveyor is presenting a new survey and not just an update.
Clients often advise the surveyor that there have been no changes to the property since the last survey was performed, but a surveyor will still have to verify this by fieldwork before extending their liability. In some cases where the work required to “update” a survey is extensive, it may be beneficial to seek quotes from other surveyors in addition to the prior surveyor.
An important conversation among transaction parties before defining the scope of work with the surveyor is whether the date of the existing survey is acceptable. If a new date of survey is required to address the new 2021 Minimum Standards, an update to the survey referencing the NEW standards will be required and a renegotiation of the Optional Table A Items addressing the new 2021 definitions will need to be considered.
Update: ASTM 1527-13 (Phase I) Revisions
The 2013 ASTM Standards for Phase I Environmental Site Assessments are sunsetting and are currently under revision by the ASTM Committee. The American Society for Testing and Material (ASTM) requires a revision every eight years that fosters a renewal process to allow for the continuation of improvement and refining of the standard addressing the ever-changing world of environmental concerns. While the below changes have not yet finalized, it offers a glimpse of what is pending.
Notable, currently proposed changes:
- REC, CREC and HREC definitions and clarification language
- Good customary and commercial practices
- 3rd party provided AUL and land title searches
- Records review and tie-in to physical setting
- Site visit requirements and adjoining property requirements, based on recent litigation
- Clarification of what type of Environmental Consultants can conduct assessments
- Interviews (i.e., updating in writing by first class mail)
- More robust and detailed report requirements
- Emerging contaminants (per and polyfluoroalkyl substances (PFAS)) – man-made chemicals persistent in the environment and body
- Clarity to the definition of a Recognized Environmental Condition (REC)
- Proposed definition of “likely” within the definition of REC
NV5/BOCK & CLARK NEWS & UPCOMING EVENTS:
NEW 2021 “Bock & Clark Handbook for Commercial Real Estate Due Diligence” addressing newly adopted ALTA Survey Standards coming soon. Contact your local representative or call us at 1-800-787-8397 to request a copy.