Traversing The Law: Why Can’t Surveyors Offer Insurance?
Unfortunately, as I continue to look for solutions, problems keep rearing their ugly heads. One of the ideas that I have been talking about for several years now — in one-on-one conversations with surveyors, in committee meetings, at conferences, in my presentations at conferences, and even on Curt Sumner’s NSPS Radio Hour — is the idea of land surveyors offering location insurance relative to boundaries similar to the way title companies offer title insurance.
To be sure we are all on the same page, the resolution of any boundary dispute is a two-part question. We have discussed this on many occasions in this column, but I’m going to repeat it again so that I don’t leave anyone behind in the conversation, because to understand the point of this column, you have to understand the two-part question.
We consistently have held that what boundaries a deed refers to is a question of law, while the location of those boundaries on the face of the earth is a question of fact.1 [Emphasis added.]
Once I finally wrapped my brain around this concept, it was nothing less than an epiphany in my understanding of property boundaries. The title question, what boundaries the deed refers to, is a legal question. As a land surveyor, that’s not my question. Given what the property is, the surveyor’s question is the factual question of location: Where on God’s green earth is it located?
There is great confusion over this two-part question within both the land surveying and legal communities. That confusion manifests itself in many ways, but most often when the title documents don’t match what’s on the ground, and vice versa. But that issue is tangential to the present discussion. For more detail on the conflict between title and location, I will refer you to a previous column, “Title v. Location,” POB Magazine, October 2012 (www.pobonline.com/articles/96756-title-v-location).
All of which prompts another question: Where did title insurance come from and why?
Once upon a time, in a process analogous to the present-day methodology for hiring a land surveyor to survey property, a lawyer sitting in his office would get a request from a would-be purchaser of property to inspect the title and render an opinion on the quality of the title (good, bad, liens, etc.) before the conveyance. However, equally analogous to present-day surveying, that opinion was as good as the lawyer who rendered it, and if there were, in fact, a problem with the title, recovering damages on a bad or negligent opinion of title depended largely on the resources of the attorney. That legal service has all but been replaced by the title insurance policy.
Back in the late 1860s, in Philadelphia, there was in fact a particularly egregious case where a purchaser lost title to certain properties due to a prior lien that was deemed invalid in the title opinion given by a title attorney. Long story short, the attorney was found to have not been negligent because he did not fall below the standard of care in rendering his opinion. As we know, a mistake or even a wrong opinion does not necessarily constitute negligence. However, the case got the attention of the title community and prompted other prominent title attorneys in Philadelphia to form an insurance company for the express purpose of insuring title. This was the birth of title insurance. The rest, as they say, is history.
This begs another obvious question: What about the location question?
With title insurance, they are only insuring the title to the property, and there could still be huge location problems. All of this prompted me to start asking — out loud — to anyone who might want to listen: Why doesn’t the land surveying profession start its own insurance company and issue location insurance? Skipping over all of the complications involved in such a venture, the first big hurdle to overcome would be determining who would pay the premium.
The title insurance model has a built-in hook. The whole purpose of the title insurance policy, at least as it has evolved to date, has almost nothing to do with the landowner. The landowner is, in essence, an afterthought. It’s all about insuring the title to a certain piece of property in order to protect the investment being made by the lender.
As things have played out, I would venture to guess that almost no money is leant on property without the buyer of that property buying a lender’s title insurance policy. For an additional fee, buyers can purchase owner’s policies for themselves. I have no idea how often this happens during these transactions. In any event, the lender’s policy guarantees the lender will be first in line when it comes time to foreclose on the property and/or otherwise get its money back on the title. While location problems can be very concerning to landowners (at least once they manifest themselves), they are of little or no consequence to the lender.
One of the sad realities that I have witnessed first-hand is that, like many attorneys and surveyors, the landowners don’t have a clue that title and location are not one-in-the-same. When the survey was waived during the purchase because it was deemed an unnecessary expense, and the survey exception was included in the title policy, homeowners are shocked to find out the garage or driveway encroachment that is later discovered isn’t covered by their policy, assuming they have one.
So, who would pay the premium for location insurance? That’s still a problem, but we have another problem that supersedes that one: Are we already providing the coverage without the premium?
Enter the 2011 American Land Title Association (ALTA) standards. In order to fully appreciate the impact the standards have on the issue of insuring location, we have to understand the difference between an “accurate survey” and “precise measurements.” I have discussed this on several occasions in this column and have pointed out that many of our sundry technical standards across the various jurisdictions confuse the two. Back in 2009, in “Missing the Mark” (www.pobonline.com/articles/93211-traversing-the-law-missing-the-mark), I described the surveyor’s paradox.
Since the focus of the vast majority of state technical standards is measurements as opposed to correctly identifying the true lines and true corners of the property being surveyed, the surveyor’s test for accuracy is how precisely the measurements are made. In many of these standards, there is even an accuracy table that is based on how precisely you measure. However, accuracy (correct results) is not dependent on precision, but we depend on the precision of our measurements as the test for the accuracy of the survey.
The 2011 ALTA standards do not confuse the two. As a matter of fact, the standards explain the difference. First, the ALTA standards tell us their purpose:
For a survey of real property, and the plat, map or record of such survey, to be acceptable to a title insurance company for the purpose of insuring title to said real property free and clear of survey matters … certain specific and pertinent information must be presented for the distinct and clear understanding between the insured, the client …, the title insurance company …, the lender, and the surveyor professionally responsible for the survey.
In order to meet such needs, clients, insurers, insureds and lenders are entitled to rely on surveyors to conduct surveys and prepare associated plats or maps that are of a professional quality and appropriately uniform, complete and accurate. 2 [Emphasis added.]
What this says is that the surveyor is professionally responsible for a complete and accurate survey of the real property being surveyed. So, what is the test for this accurate survey? How precisely I made my measurements? No. The test is how well you applied the appropriate boundary law principles.
Boundary Resolution: The boundary lines and corners of any property being surveyed as part of an ALTA/American Congress on Surveying and Mapping (ACSM) Land Title Survey shall be established and/or retraced in accordance with appropriate boundary law principles governed by the set of facts and evidence found in the course of performing the research and survey.3 [Emphasis added.]
To be sure you understand these concepts, the standards explain the difference between accurate results and precise measurements.
Relative Positional Precision is a measure of how precisely the surveyor is able to monument and report those positions; it is not a substitute for the application of proper boundary law principles. A boundary corner or line may have a small Relative Positional Precision because the survey measurements were precise, yet still be in the wrong position (i.e. inaccurate) if it was established or retraced using faulty or improper application of boundary law principles.4 [Emphasis added.]
In other words, the standards make it clear that identifying the wrong boundary corners and wrong boundary lines is the gauge of an inaccurate survey no matter how precisely you made your measurements.
When the surveyor signs the ALTA certification and the survey exception is removed from the policy, the surveyor will be certifying to the title insurance company, among others, that the survey was “made in accordance with the 2011 Minimum Detailed Requirements for ALTA/ACSM Land Title Surveys.” That means that you have a complete and accurate survey (correct results). This, in turn, means that you have identified the correct location of the property boundaries shown on the survey by applying the appropriate boundary law principles.
When we perform an ALTA Land Title Survey, are we not now insuring the location question which will be enforced when the title company has to pay out to an insured because, in fact, there are encroachments not revealed due to an inaccurate survey that failed to locate the true and correct property boundaries? I don’t know how else this can be read.
Once upon a time, you could get a little more money to perform an ALTA survey because of the extra work involved and the perceived “heightened” requirements, etc. Thanks to the ALTA brokers, however, that is no longer the case. Now, ALTA surveys like almost any other aspect of surveying are done so cheaply we might as well be giving them away. Are the 2011 ALTA standards a friend or a foe? I guess it all depends on how you feel about being in the insurance business.
- Theriault v. Murray, 588 A.2d 720, 721 (Me.1991).
- Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys (Effective February 23, 2011), (a.k.a. 2011 ALTA Standards), Sec.1.
- Id. at Sec.3.D.
- Id. at Sec.3.E.iii.
Jeff Lucas is in private practice in Birmingham, Ala. He is president of Lucas & Co. LLC and publisher of “The Lucas Letter,” a legal newsletter for the surveying and engineering community. He can be contacted through www.LucasAndCompany.com. For a more in-depth study of the legal principles that affect our everyday practice, subscribe to “The Lucas Letter” at www.LucasAndCompany.com.
Neither the author nor POB intend this column to be a source of legal advice for surveyors or their clients. The law changes and differs in important respects for different jurisdictions. If you have a specific legal problem, the best source of advice is an attorney admitted to the bar in your jurisdiction.