Have you ever wondered what ALTA/NSPS stands for? Or maybe you want to know what an ALTA Survey shows? Read on to learn everything you need to know about ALTA/NSPS Land Title Surveys.
What Does ALTA/NSPS Survey Stand For?
ALTA is an acronym for the American Land Title Association and NSPS stands for the National Society of Professional Surveyors. In 1962, the two industries came together for the first time to design a survey product that would rely on the land surveyor to report, offer an opinion, and certify relevant issues about a property to the title insurer. The surveyor’s responsibilities are set forth in the Minimum Standard Details Requirements for ALTA/NSPS Land Title Surveys. The requirements have been revised about ten times since their inception to the current requirements that took effect in 2021.
What is an ALTA Survey?
The main purpose of the ALTA Survey product is to provide the title insurer with a document to review that will assist in making decisions about deleting the standard survey exceptions from the issuance of their title policy. Based on what is then reported on the survey, the insurer may also add specific exceptions to the matters shown. The standard exceptions are (but are not limited to):
- Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of persons in possession thereof.
- Any encroachments, easements, discrepancies, conflicts in boundary lines, variations, or shortages in area or content or any other facts which an accurate survey would disclose.
- Any lien, or right to a lien, for services, labor or materials heretofore or hereafter furnished, imposed by law and not shown by the public records.
- Any rights or claims of parties in possession of all or any part of the premises.
What Does an ATLA Survey Include?
A commercial real estate transaction involves many parties with varied interests in the property. Although the main intent of the survey benefits the needs of the title insurer, the information revealed on the survey can address many questions or concerns about the property. The presented ALTA/NSPS Land Title Survey is a picture of the property showing:
- The surveyor’s findings of the property boundaries
- The easements and survey related exceptions to coverage cited in the title commitment or known to the surveyor
- The improvements, visible utilities, and many significant observations within the insured estate (the property).
Depending on the defined scope, the survey can reveal specifics about the property relating to zoning issues, flood hazard matters, access to public roads, evidence of possible encroachments, parking configurations, etc.
ALTA Surveys Can Help Determine Insurance Coverage
The lender and buyer are concerned with the present and future use of the land and all restrictions, encumbrances, and benefits or issues that come with owning or mortgaging the property. The survey reports observed indications of these matters so the lender or buyer can evaluate the risks and seek any assurance from their title policy coverage.
The title insurer is asked by the lender and/or buyer to provide insurance against potential use losses or claims against the land that may arise after the purchase of the property. Such coverage includes, but is not limited to, protection for the lender or buyer against:
- Boundary line conflicts with adjoining properties
- Encroachments onto and from adjoining properties
- Rights of third parties, usually in the form of easements, leases, or other encumbrances
- The contiguity, or lack thereof, of multiple parcels that combine to form the property
- Access to public highways
- Matters on the property that may affect zoning issues or compliance.
The insurer then uses the survey to assess the risks and to determine what exceptions from coverage must be included within their policy.
ALTA Surveys Protect Against Claims After Conveyance
The seller of a property also uses and relies upon the ALTA/NSPS Land Title Survey as protection against potential claims from the buyer after conveyance. The seller is frequently asked within a purchase agreement to guarantee all improvements are located within property boundaries, all improvements comply with current zoning regulations, others do not have rights to the property other than those disclosed in the form of easements, leases, or other encumbrances, and no boundary line conflicts exist with adjoining owners. A current survey could serve as a validation of this guarantee or report any discrepancies.
How to Get an ALTA Survey That Meets the Needs of All Parties
The surveyor has a complex set of responsibilities when preparing an ALTA/NSPS Land Title Survey to satisfy all users. Additionally, the buyer, seller, and lender typically engage counsel to represent their interests. Although one transaction party is responsible for paying fees and engaging the surveyor, the surveyor’s obligations extend to multiple parties. It is good practice to discuss the scope of the survey with all concerned parties prior to engaging the surveyor. If necessary, the surveyor can be asked to name those parties in the survey certification. In doing so, the final survey can then satisfy the needs of all parties involved.
If you’re interested in learning more about ALTA/NSPS Land Title Surveys, check out our commercial real estate due diligence handbook, take a look at our sample ALTA/NSPS survey, or visit our blog. Or if you’re ready to request an ALTA Survey, request a quote today.