Bock & Clark 2021 May eNewsletter

Utilities: Optional Table A Item 11 Revised Once Again

When the 2021 ALTA/NSPS Land Title Survey Minimum Standard Detail Requirements went into effect on February 23, 2021, the definition of Optional Table A Item 11 was once again revised and simplified to manage client expectations. It is important to note that Item 11 addresses UNDERGROUND (non-visible) utility installations and OBSERVED (visible) above-ground evidence of utilities as a part of the surveyor’s responsibilities as defined by Section 5.E.iv of the Minimum Standards. Item 11 should only be negotiated in situations where IN ADDITION TO OBSERVED (or visible) utilities, there is also a need to gain perspective about the UNDERGROUND features.

In cases where an ALTA survey is provided for a transaction where the property is being sold to a new entity or being refinanced, there are typically just two concerns regarding utilities:

1. That the property has sufficient utility service for its operation.
2. That all required utility services are either entering the property through an adjoining public roadway or the property enjoys a beneficial easement that brings the utility service to the property.

These determinations can be easily made as defined by the surveyor’s responsibilities in the Minimum Standards to locate and report the OBSERVED evidence.

On occasion, there may be cause to include Item 11. For example, when a vacant property is slated for improvement or when an existing property need requires a reconfiguration of UNDERGROUND features prior to any construction. When included, there will likely be additional fees and timing extensions for the survey delivery. It is important to note that if underground utility information is needed for the purpose of engineering or design it is usually quite extensive and would not be included within the scope of the Item 11 definition and therefore should be discussed, defined, and negotiated under blank Table A Item 20.

The revised (or simplified) 2021 Item 11 definition now contains two options to consider.

1. For Item 11(a), the surveyor will review plans and/or reports provided by the client indicating evidence of any underground utility feature. These may include plans or reports the client sources from utility companies, as-built surveys, prior surveys, or site plans used for any construction or development of the surveyed property. The surveyor must include a reference to the sources of information as these plans may reveal evidence of underground service.
2. For Item 11(b), the surveyor will coordinate a request independently or with the client for a private utility locate marking on the surveyed property. A utility locate company will then use equipment to determine underground features and provide ground markings (either by spray paint or utility locate flagging). The surveyor will then report the observed evidence of these markings along with their source on the survey. In some jurisdictions, 811 or other similar locate requests by the surveyor might be ignored or result in an incomplete response. For liability reasons, the request for such markings may need to be made by the owner of the property. Some locator companies only provide ground markings if there is pending excavation. The client and the surveyor need to discuss any such potential issue. If this option is included and there is no response to these requests, the surveyor shall note on the plat or map how it affected any determinations of underground evidence.

In the 2021 definition, “evidence of” these underground features replaced “location of” the underground features. It is important for the client, insurer, or lender to understand source information from plans and/or markings will be combined with observed evidence of utilities pursuant to Section 5.E.iv. to develop a view of the underground utilities. However, lacking excavation, the exact location of underground features cannot be accurately, completely, and reliably depicted. The new simplified definition in 2021 was revised so it is clearly understood that when the surveyor is reporting information either from provided site plans or utility locate ground markings, it still does not indicate the exacting location of an underground service. The only way a surveyor can report an actual location is to excavate the property to observe the feature. For more information, please refer to our “User Guide to Optional Table A Items” on page 17 of our NV5/Bock & Clark Handbook for Commercial Real Estate Due Diligence.

Tell Me About My Zoning District

Many people commonly assume that if they own a commercial property, the property is located in a commercial zone (likely Zone C). This may or may not be true. It might be in B, for Business, C-3, PD, PUD-23, XR-13-R, DB-4….the list goes on and on. The fact is each municipality has its own unique system for zoning. At its most basic, you might see C for Commercial, R for Residential, A for Agricultural, and I for Industrial. But the governing jurisdiction for a property may use B for Business instead of C for Commercial. To further complicate matters, it may have been determined that more specific requirements would be necessary for certain sections, such as a height requirement or uniform street frontage. There may be a DB zone, for Downtown Businesses and the area to the west of that DB district may have more historic buildings with no parking areas thus making it a DBH district. There really is no limit to the naming systems that might be used in any given municipality which may result in a delay in your transaction.

In some instances, a property may have been developed as part of a larger project in a PD (Planned Development) or PUD (Planned Unit Development) zoning district. When cited as PD or PUD, it is not common to find a specific list of regulations for things like height, setbacks, parking, etc., within the general zoning code. PD districts generally have development-specific or property-specific regulations that can only be found as part of the development plan or site plan. To ascertain the specifics of the property, interested parties will need access to the associated plan document.

Another item to keep in mind is that there is a difference between zoning and land use. There may be separate maps for each, and for good reason. Land use provides a general description for a broad section of area. A municipality might intend for an entire section of a city to be commercial as depicted on a land use map. However, within that designated commercial land use area there may be a lengthy list of zoning districts, all of which are related to commercial uses, but which indicate more specific regulations. The commercial land use designation is where the innumerable zoning categories can be found to identify the specific zone.

It is good to recognize that each municipality is unique in how they administer zoning. When researching and reporting zoning, take the necessary steps to check the zoning map and the zoning code and verify your findings with your local zoning department. Or contact NV5 Zoning, where our experienced team members will assist in putting together a current zoning report to ensure that your transaction proceeds smoothly. Call: 1-800-787-8390 to request a quote or for more information.

NV5/BOCK & CLARK NEWS & UPCOMING EVENTS:

• Scott Kardos, Director of Business Development – West, recently attended the Crittenden Multifamily Conference in Dallas, TX.
• NV5/Bock & Clark Director, Jim Brown, will be presenting a seminar on the new 2021 ALTA/NSPS Land Title Survey Minimum Standard Detail Requirements at Southern Methodist University on June 2^nd.
• NV5/Bock & Clark is pleased to be a sponsor at the upcoming CREW Cleveland Past-Presidents’ Golf Outing taking place at Quail Hollow Country Club on June 24^th. Director of Business Development – Midwest, Lori Gabor, will be on-hand to offer her skills as a 5^th Putter.
• As part of the 2021 CREW Cleveland Board of Directors, NV5/Bock & Clark Director of Marketing, Laura Hengle, will be attending the CREW Network Spring Leadership Summit in St. Louis June 10-11.
• If you are interested in receiving a copy of our NEW handbook containing the updated 2021 ALTA Survey requirements, visit our website www.bockandclark.com to request a copy.