The Survey Exception and its Deletion from a Title Insurance Policy

Some buyers and many lenders require the deletion of the “survey exception.”  Schedule B-2 of a title policy excepts to any “discrepancies, conflicts, or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements.”  While the Texas Department of Insurance does not allow the insurer to guarantee the area of property (that is, the amount of acreage), the balance of the clause other than “shortages in area” can be deleted from the exception, giving coverage to the other issues.  So what exactly is covered?

First, there are errors and conflicts in the original Land Patents which were granted to landowners in years past, due in part to primitive surveying methods.  These errors can lead to a “conflict” where two tracts overlap; or to a “vacancy” where there is a strip of unpatented land between two tracts.  Also, other deeds may contain descriptions which conflict with the stated boundary line of a tract.  So deleting the “Survey Exception” guarantees that the boundaries of the tract and the surrounding tracts are not in conflict.

Next, if a survey is provided, the survey is required to show any encroachments, that is, anything over the boundary line from adjoining property onto the subject tract.  Likewise, if an existing improvement on the subject tract is partly over the property line, it will be noted by the surveyor as a “protrusion” or if off the property, “overlapping of improvements.”  The same is true for encroachments and protrusions onto existing easements and recorded building set-back lines. These will be noted on the policy as exceptions, even if the survey exception is deleted, but if none appear, the boundary lines are guaranteed to be accurate, and the improvements are properly situated on the tract.

Questions?  Feel free to call or email for additional information on this or any other issue.

Prepared by J. David Carpenter, Vice-President and General Counsel, Home Abstract and Title Company.; 254.715.8461.

Next Blog Post:  What is required to delete the survey exception and what does it cost for either an owner’s title policy or a mortgagee title policy