ALTA Survey Certification - "successors & assigns"

Check the NSPS website.

> Can anyone provide any links to 2011 or later articles by Gary Kent or other experts weighing in on this topic, and providing reasons against including "successors and/or assigns" in the list of certified-to parties?
About a month ago a paralegal was trying to get me to certify to "successors and assigns". I refused, and she dropped the "other surveyors always do it" line. I asked if I was her client if she would allow me to sign such a certification. She quickly changed the subject.

My point is that they already know that such a certification is a very bad idea - for you - and a very nice prize for their client. They are fighting for their clients best interest, not yours.

I'm sure where to look on the NSPS site,

I found this under FAQ's

QUESTION #4:What happens if the Surveyor is requested to change the Certification?

Does that mean it’s not a “real” ALTA/ACSM Land Title Survey?

There is some concern in the Client community regarding the use of the words “only” and “unaltered” in Section 7 covering Certification.

Under the 2011 Standard, the only certification allowed on the face of an ALTA/ACSM Land Title Survey is the Certification in Section 7, except as required by law or regulation.Some state surveying boards, for example, require specific wording for Certification.

The Certification in Section 7 is almost always sufficient and this standard “short-form” Certification covers every issue that the Surveyor can actually and honestly certify to by stating that the Survey was conducted in accordance with the Standards.The change effected by the wording in Section 7 of the 2011 Standard is essentially a statement from the title industry and the surveying profession that title insurance coverage can be provided without additional or alternate Certification.

For those Clients who require an additional or alternate Certification, it is permissible to negotiate with the Surveyor to provide another additional Certification on a separate sheet of paper and cross-reference it to the Survey.

In lieu of an additional or alternate Certification, the drafters believe that Lenders may simply use these standards (including Table A, and Table A, Item 22, if necessary) as the basis for their requirements.

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I am always surprised at this question. The liability is going to run with the "successors and assigns" whether that is included in the certificate or not. We do not the ability to waive future reliance on our work, and the client can not waive future rights by others.

At least that's what I was taught 🙂

Dtp

"Certification to successors & assigns is extended only during the first year, as measured from the date of the survey. Certifications to successors & assigns beyond the first year will be extended on request, at the rate of $500 per party. All such certifications will only cover the statutory period of contract liability as measured from the date of the original survey, and only the contract terms agreed on at that time."

You need to extend during the first year because that's part of the way business is done and for which the survey is needed. After that time, things are taking place that the surveyor has no reasonable way to contemplate in the original contract.

The rate charged should be what an attorney would charge you to respond to a contract breach claim by a party you extended certification to after the first year.

You need to make certain the language limits the certification to the statutory period from the date of the survey. You don't want to restart the clock, unless you really are restarting the clock by doing a field visit and actual update of the service.

Float this by your attorney and they can write up standard language that will hold up in your jurisdiction.

Just saying yes or no based on some article is not a good business practice. Put forth a reasonable standard operating procedure that you give to all (even those who don't request certification to successors & assigns).

I wish NSPS would put forth the above language or something similar for each jurisdiction so that we all could be doing the same thing. Would make life a lot more simple and predictable.

Liability runs only to those parties the surveyor could reasonably be expected to contemplate will rely on it. During the first year we can reasonably expect the mortgage to be bought and sold, and the property to be developed in some way, and maybe transferred, all based in part on the survey. After that, who the heck knows? I would expect all reasonable reliance on the survey, by anyone I could possibly contemplate, is done at that point. I expect unknown people (including corporations) having dealings with the parcel after that point would get an new or updated service if reliance on a survey is crucial to whatever it is they are doing. Even if they don't want an update, I at least should have the right to know who they are and charge them for having a contract with me.

> "Certification to successors & assigns is extended only during the first year...
Is this contract language or part of your certification?

>The liability is going to run with the "successors and assigns" whether that is included in the certificate or not.

Someone once posted the theory that even though a person might have the right to rely on your survey, too broad a certification would strengthen their case and save them effort by removing the need to prove that.

"...at the rate of $500 per party."

That's about 10 times less than I would offer it for. Currently I just say no.

My standard answer is "My E&O insurance doesn't allow me to certify to unknown parties". They will usually send a couple more names that I end up charging more to add. I haven't ever called and asked the ins company, but that is my understanding based on my Agent's opinion (he is pretty much E&O illiterate). It has worked every time.

"Liability runs only to those parties the surveyor could reasonably be expected to contemplate will rely on it."

I would sure like to know your reference for that statement! Who are to forecast who might purchase the property in the future? Our plans are a point in time, so any changes after the survey aren't our responsibility, but a negligent error won't go away just because there is a new owner.

When you record a plan, anyone that pulls that plan from the registry should be able to rely on that plan. Aren't ALTA plans prepared as if they are to be recorded?

Here is a direct quote of what Gary Kent e-mailed me today: (my parenthetical added for your benefit)

"What I have said is that “successors and assigns” for the lender is no big deal. We are liable to the lender for the life of the loan – which on commercial loan is usually 7 years. If the lender sells the loan and we are liable to their successor, it’s still only for the original 7 year life of the loan. So, your client’s first statement (What does it matter if KeyBank sues you (over your survey) or if one of their successors or assigns does?) is pretty much on point.

What Victor O. Schinnerer has told me in recent years is that they have no E&O concerns about surveyors certifying to the successors and assigns of the lender.

Now … successors and assigns of the buyer is a different matter. I would never do that. And title companies do not need successors and assigns – they are not going to sell the policy."

The ALTA will be good for a limited time as far as most title companies are concerned.

The "Successors and assigns" can pay me to do a whole new ALTA when they acquire that property.

Why certify to them when the chances are REAL good that conditions will change in developing areas real fast, so they will need a new survey anyway. Do you really think that anyone would buy high dollar parcels and then use someone else's survey? Really?

It just seems to me to be a totally unnecessary thing that paralegals are taught in school. Same as their idea that EVERY transaction REQUIRES an ALTA survey. Much of this is based on the ignorance of the people doing the work. They do not HAVE to know what they are doing and they are going to bill the client triple what you do and then complain that your prices are WAY out of line.

> The "Successors and assigns" can pay me to do a whole new ALTA when they acquire that property.

In a lot of cases, the lender is buying the debt with the intent to turn around and re-sell it soon. Sometimes immediately. Therefore, they won't hire a surveyor who won't include "successors and/or assigns" (for the lender only) in the certification.

Gary knows a lot more about liability than i do, so if he says it doesn't significantly increase my liability, then I reckon I'm ok with doing it.

Don, it's just basic contract law, any text book should mention it. I think what you are probably referring to is liability for negligence. Anyone harmed by negligent practice can come after you, within the statutory time. Everyone is a contemplated party relying on your work when it comes to negligence. But certifications have to do with extending a contractual relationship.

I just wrote it as I thought about it. I haven't done an ALTA in more than a decade. My surveys usually have no certification on them. When they do, it is pretty basic. "This survey was prepared by or under the direct supervision of the surveyor listed hereon." But I have been asked in the past to certify to additional parties, and told them $500 per, resulting in "well, I guess we really don't need it". As someone else mentioned, they are just trying to get free contract relationship to exploit if they want to later. A little more billable time if they can do it. You or your e&o must make more of a response than if you clearly have no contractual relationship with them.

I'm not sure I would agree to perform an ALTA under the current standards. As a recent Lucas article points out, it seems to be insuring location without the insurance premium. I agree, to add more to that contract should be much more than $500. And the up front fee should be 10-20% of the value of the property.

I agree with that mostly, but I think you are liable only for the contract period in your jurisdiction (ny is 6 years), unless there is a clause in the ALTA contract that you agree to another jurisdiction. I hope no one is signing a clause like that!