Client has a 1.3m dollar house that the title company ordered a mortgage certificate for closing in Oklahoma.?ÿ Client/Title Company relies on survey for said closing.?ÿ Two weeks later client has us come out and do a boundary survey on tract to check everything out after realizing that the mortgage certificate had out buildings that were missing and concrete in areas that there is no concrete....i.e. a fraudulent survey(probably from an old survey and the surveying company just stamped it an went on).?ÿ We find that the clients house is 1.8' into a U/E with the actual outside wall and about 4.8' after overhang is accounted for.?ÿ While the U/E is shown on the mortgage certificate the house on the certificate is not shown inside the U/E.?ÿ In truth the house is inside the U/E.?ÿ What course of action would you guys advise for the client?....who is on the hook??ÿ Wondering what kind of financial repercussions this might entail.?ÿ Thanks for the advise!!?ÿ?ÿ
And I suppose the client doesn't have title insurance, or if he does it exempts anything that would be revealed by a REAL survey (not their mortgage survey, of course).
What are the utilities, and how much difficulty would the house present if the utility company had to work there?
Jake,
My advice to the client would be to allow the title insurance underwriter to handle it.?ÿ The title insurance policy underwriter is "on the hook" for this one.?ÿ
There are a lot of houses that encroach into utility easements.?ÿ While I don't particularly think it's a big deal, the governing municipality might raise a stink and there could be a cloud on the title affecting future property values.?ÿ A variance approved by the city would probably clear up the title.?ÿ I'm assuming the structure is within the limits of the lot.
There's two things that will probably happen; either the underwriter does nothing to clear the title, or sues the surveyor for damages and costs to clean up the title.?ÿ?ÿIf the underwriter won't attempt to clean things up the property owner would have a case against his insurer and the party that prepared the "mortgage inspection certificate".?ÿ That's when things start blowing up and everybody gets named in the suit.
PS - How's you dad doing??ÿ I found some recent CCRs he filed.
?ÿ
Title Company will use any available past survey to sell their Title Policies and then disclaim that it is not valid until a Boundary Survey is made to show current conditions on the property.
Many times they will charge an extra fee for this.
It is no wonder we Surveyors get such a bad reputation from an industry that feeds upon us and places all liability on us and expects all that for a low price of $300.
IMVHO, were it to happen that $5k be the best price around would be a welcome bargain for a great Boundary Survey to know that your improvements are on your property within setback lines and according to HOA, City, County and State Code.
Title insurance says you own the house and lot, not that you have full use of it or that is is clear of other encumbrances such as easements.
Good news is they might owe you for those missing outbuildings.
Paul in PA
Talk with the easement grantee, probably a municipality or county, and see about vacating that portion of the easement the house is encroaching upon. I've screwed up house staking a few times and an easement vacation is the easiest way to go. You will find that its the path of least resistance with respect to objections. ?????ÿ
As said above a partial easement vacation is usually the easiest way to go. Is it a P.U.E. or an easement granted to to a particular utility? In my experience?ÿ CO-OPs and municipal utilities are usually very reasonable. For profit companies can be just as nice to work with, but some, especially larger ones, will fight you with everything they have for no apparent reason.?ÿ
?ÿ
It is only an issue at all if your client decides he wants out of the deal because of the encroachment. Or if he defaults on the mortgage.?ÿ I mean, the thing could have very well lay dormant for many years with nobody being the wiser.?ÿ?ÿ
If the building has been in place for the requisite 15 years this may be a case where the building has extinguished 1.2 feet of the easement by adverse possession. Knowing this, and presuming that whatever utility the easement is for is getting along OK in the existing restricted space, the easement holder may be willing to modify their easement agreement in order to clear up the title.
In any case, the title company needs to be notified. Then your client can decide if he wants to lawyer up.?ÿ Anybody with a 1.3m house in OK probably has one on speed dial.?ÿ
?ÿ
Two important questions. Who are the potentially responsible parties. Of those, who has the deepest pockets??ÿ
The answers are unimportant (and likely wrong) if provided by the surveyor. Get an attorney.?ÿ
Your explanation of the situation is bad, imo.?ÿ So the buyer paid for an ALTA which turned out to be inaccurate?
So the buyer paid for an ALTA which turned out to be inaccurate?
I very much doubt that we are talking about an ALTA. This is your garden variety Mortgage Certificate.
That was how I read it, too. ?ÿAn el cheapo windshield driveby while looking at an old mortgagee title inspection job from several years earlier by the same firm. ?ÿYou make the easy profit on hundreds of such jobs then pay that back out on the one that bites you where you sit. ?ÿNot my kind of practice.
Oklahoma (OSLS) should use this example and I'm sure many other times a "Mortgage Inspection Certificate" has failed to protect the public to get the Board to finally eliminate these atrocious things because the boards number one reason for existence is to protect the public.
I can't believe any board would regulate a document that has the language "Mortgage Inspection Report?? and shall not be designated as, or construed as being, a Land or Boundary Survey.Professional Land Surveyors showing measurements on a mortgage inspection report that are not true representations of the conditions that were found at the time of the inspection will be in violation of the Minimum Standards for the Practice of Land Surveying. ?ÿThe statement furnished on the certificate shall be similar to the following form ..."
The Oklahoma Real Estate Commission has the following language in their "Standard Contract"
Pin Stake Survey. Buyer can pay for a Pin Stake Survey in lieu of the Seller paying for and providing the Buyer with a Mortgage Inspection Certificate; however, the Buyer must initial the space provided in the Contract. Note: These are not similar: A Pin Stake Survey shows boundaries of the Property due to physically located stakes being placed at such boundaries; a Mortgage Inspection Certificate does not provide staked boundaries of the Property. If Buyer has any questions regarding lot lines, easements, etc., it is recommended that Buyer contact a surveyor of Buyer??s choice to determine the cost and type of survey Buyer desires.
WTF is a "Pin Stake Survey" ?
It's definitely not listed on OBPELS list of surveys and from what's listed above, doesn't meet the Oklahoma minimum standards for Land Surveying.
?ÿ
My take on the Mortgage Inspection Certificate is it's certifying the lot exists, its assessor's map approximate shape and if there are building(s) on it they're shown in their approximate correct location.?ÿ Good enough for the bank to issue a mortgage, I guess.?ÿ A decade ago around here there were non-licensed individuals who offered "pin surveys" where they poked around and flagged up any monuments they found, nothing more, no maps, claims that the monuments depicted the boundary, etc.?ÿ Their position was they weren't land surveying.?ÿ The Board put the kibosh on that fairly quickly.
Your explanation of the situation is bad, imo.?ÿ So the buyer paid for an ALTA which turned out to be inaccurate?
What makes you think that a Mortgage Survey is an ALTA Survey?
Oklahoma (OSLS) should use this example..
You assume that OSLS, as a group, would support getting rid of Mortgage Certificates. While it is true that there would be support from a faction, a large portion of the membership makes its living on these things.?ÿ
Texas eliminated these so called "Mortgage Inspections" in 1992, (I'm not even going to call them surveys because OBPELS doesn't classify them as such) and the quality and the price both rose. As I stated earlier, the whole reason for Professional Licensure is to protect the public not supply employment. Its way past time the second oldest profession in Oklahoma has more morality than the oldest profession in Oklahoma.
I guess it's been about ten years ago when we (the OSLS & reps from the State Board) sat down in a series of open meetings to discuss ridding ourselves of the cursed mortgage inspection.?ÿ Not surprisingly a large vocal majority wanted to them abolished.?ÿ A lot of us didn't care if the real estate industry used them, we just wanted land surveyors to be required to either survey the property properly, or leave it alone.?ÿ There was a prominent consensus that agreed such documents caused more confusion (especially to the public) than good.?ÿ My personal sentiment was that I didn't care if people performed mortgage inspections, just keep us surveyors out of it.?ÿ Let the real estate industry come up with some folks that would ultimately bear the liability.
As it turned out a very small minority of a few surveyors that make their living drawing these cartoons had several real estate lobbyists "talk" to some folks at the State Board and the legislature.?ÿ?ÿ?ÿLet me tell you that was the end of that nonsense.?ÿ The sentiment of 1000 surveyors was ignored for the desires of a handful of idiots.
I was so disgusted I haven't been a member of the OSLS since then.?ÿ What a bunch of pure unadulterated warm horse sh*t.?ÿ
Couldn't agree more!! I was president of OSLS around this time and had little say so in how the situation proceeded forward. I haven't even been remotely interested in being a member ever since.
Thanks for all the input guys....there are some things moving forward on this and it's going to get deep fast.?ÿ I'll update you guys on everything next week after a few key hurdles have been met.?ÿ?ÿ