I have been under a lot of pressure to add "successors and assigns" to my ALTA certification behind the lenders name. I am very hesitant to certify to "future unnamed parties" and have not done so in the past. This request always seems to come up right before the closing date. I would like to know if anyone adds this to their certification.
Also, has anyone been asked to sign a bank prepared certification as a separate letter?
if so, did you and why?
Yes, we have added that to our certifications on a regular basis. It is normally associated with the lender, who might be selling the mortgage to another lender so you are kind of limited in exposure in a way. Not exposing yourself to future owners, other law firms, other title companies etc. To me a certification actually limits your exposure as I have always thought by just signing the map we were certifying to anyone who had an interest in the property that the survey was correct. These are my thoughts..and..yes..in rare instances I have signed a certification on a separate piece of paper at the request of a bank, but rarely.
We also add that when requested.
But will not sign any other separate certification.
Yes, I almost always have "successors and/or assigns" in the certification.
I will not sign a separate certification, period.
I do not add successors and assigns and I do not use the separate certification either. Stick to your guns on what you decide to do. The attorney usually has a paralegal to pressure you into signing things you don't want to and/or shouldn't sign.
Sometimes I think of it as a game and have fun while I do it. My favorite lines are how they tell you 1.) "... this million dollar deal will fall through just because you wont sign this certification..." and 2.) "I have never had a surveyor not sign this..."
Terry
> I have been under a lot of pressure to add "successors and assigns" to my ALTA certification behind the lenders name. I am very hesitant to certify to "future unnamed parties" and have not done so in the past. This request always seems to come up right before the closing date. I would like to know if anyone adds this to their certification.
> Also, has anyone been asked to sign a bank prepared certification as a separate letter?
> if so, did you and why?
I have always wondered if adding those certifications really limits your liability. If some other party than is listed on your certification gets damaged, do you think a court wont award damages based on that?
> I have been under a lot of pressure to add "successors and assigns" to my ALTA certification behind the lenders name. I am very hesitant to certify to "future unnamed parties" and have not done so in the past. This request always seems to come up right before the closing date. I would like to know if anyone adds this to their certification.
> Also, has anyone been asked to sign a bank prepared certification as a separate letter?
> if so, did you and why?
There is a really good reason the standards say you may certify to others "as negotiated with the client".
The most common theory of law used to sue land surveyors is known as the tort of negligent misrepresentation. In order for someone to prove their case for that tort they must prove each of 4 separate elements. If any of the 4 elements fails, so does the suit.
The elements are:
a party justifiably relies
to their detriment
on information prepared without reasonable care
by someone who owes the relying party a duty of care
If you do a survey for Smith, and Smith sells the property to Jones. Then Jones sells the property to Brown. Then Brown sells the property to Johnson. If Johnson finds what they believe is a problem with the survey, how open are you to liability?
The first thing Johnson would have to prove is that you owed them a duty. Do you owe all successors and assigns a duty forever more? The answer to that question isn't always clear. Well, it isn't clear unless you sign a certificate to "successors and assigns".
In the circumstance I describe it is clear you owe your initial client "Smith" a duty of care. That duty arises out of your contract (written or oral you always have a contract with every client). When you sign a certificate to successors and assigns you remove the burden for other parties to prove you also owed them a duty of care.
The bottom line is YES you are taking on additional potential liability when you sign that certificate. That is the entire reason the attorneys want you to sign it. If you have professional liability insurance you might want to read the fine print in your policy. All I have ever seen indicate that you will not be covered if you voluntarily accept liability for matters which you would not have otherwise been liable.
My advice is to contact your client and negotiate an extra fee for the extra liability. Very seldom will the client want to pay anything extra. Once they refuse to pay more, you can refuse to accept the additional liability.
Larry P
> Yes, we have added that to our certifications on a regular basis. It is normally associated with the lender, who might be selling the mortgage to another lender so you are kind of limited in exposure in a way. Not exposing yourself to future owners, other law firms, other title companies etc. To me a certification actually limits your exposure as I have always thought by just signing the map we were certifying to anyone who had an interest in the property that the survey was correct. These are my thoughts..and..yes..in rare instances I have signed a certification on a separate piece of paper at the request of a bank, but rarely.
What you say sounds reasonable. But... ah... it doesn't work that way.
>Not exposing yourself to future owners, other law firms, other title companies etc.
This is exactly what you are doing and exactly why they want you to do it. The attorney is doing their job when they ask you to take on additional liability. But we are not required to help them by taking it.
Larry P
>
> I have always wondered if adding those certifications really limits your liability. If some other party than is listed on your certification gets damaged, do you think a court wont award damages based on that?
Adding the successors and assigns language greatly expands liability. See my note below.
Larry P
Rule #1.
If the lawyer for a party besides yourself is asking for it you can bet your last dollar he is not interested in protecting you only his client and if it leaves you with your head on a platter he could care less.
People, in various land industries, went to a lot of work to design our certifications and we ALL need to stick to them.
If no one agrees to changes then the lawyers can't say "The last surveyor made these changes".
Gary Kent says don't do it... The American Surveyor - September, 2007.
Larry, is on the money with this. I never sign "succesors and/or assigns" certifications. When asked to do so, I reply that my charge for this service is 2x the cost of the survey. I believe that is fair compensation for extending liability to unknown parties forever. Nobody has yet to take me up on that offer.
I realize people a lot smarter than me say don't sign it. I also realize that I should not sign it and will try to avoid doing so. However, I have always believed, wrong as it may be, that adding successors and assigns doesn't matter, and I still haven't been convinced that it does matter.
A survey is nothing more than a statement of the conditions of that property on a certain date, a snapshot in time if you will. Now I understand that we don't want to be liable forever for a survey, and that after a certain period, we ought to be able to sleep easy at night. However, within that time frame, what does it matter how many times the property transfers? It appears to me that if we state the conditions of a piece of property on a certain date, anyone that relies on that survey (within the statute of limitations) has a potential claim against us, whether or not they are named on the survey. If through some odd occurrence, a new truck is transferred 5 times in the first two months it exists, is Ford Motor Company not going to honor the warrantee because they didn't have a contract with the fifth owner?
Once again, I understand that people smarter than me say don't add successors and assigns, but for the life of me, I can't comprehend what difference it makes.
I read an article written by Jeffery Lucas, PLS, Esq. in the POB Magazine, when the new ALTA standards were published. He listed all the certifications required of the surveyor. Including schedule 'A' and professional liability. Surveyors should not sign additional certs period. I don't have the article at hand, see Jeff Lucas website. 🙂
You should not certify to "future unamed parties". Anyone you know or should have known will rely on the survey is owed a duty of care. This would include the owner (if that's who you are working for), their attorney helping them with the deal, the buyer and their attorney, the title company, the lender. Because you know or should know how business works in real estate the duty is also owed to successors and assigns of the lender.
So, the best bet is to limit: "successors and assigns of the lending institution". If they want anything more than that, then you have to negotiate what it's worth to form a contract with these as yet unknown entities that will enable them to name you in a lawsuit. All those with a written contract will be sued if an issue arises and it costs 500-1000 dollars to merely respond via attorney letter.
The certification does not garauntee the correctness of the survey unless you (unwisely) say it does. It only promises that you did what the certification says you did. If the Alta says you counted parking spaces, you forgot and made a guess, then you are liable if wrong. But your professional opinion of the boundary should not be garaunteed because you have no control over the compentancy of attorneys, or over the ability of owners to settle/agree on a different location, etc..
I imagine it might be different in some states, but when a person sells land, and something is later found wrong with the title, the entity that bought the land can go back on the person who sold it to them. Then the person who sold it can go back on the vendor. In that case anyone who has anything to do with the chain of title will get drug into the litigation regardless of whether "successors or assigns" is on the certification. In our state, we have a 5-year period that we are legally responsible for our work. After that we cannot be sued for malpractice. Not sure about other states.
If I prepare a survey to be used as part of a conveyance of real property financed through a commercial lender, the certification on the survey is ALWAYS to the lender and ISAOA, as well as to various other parties; buyer, buyer's atty, title co., bank atty., etc.
Those surveys amount to probably 90% of my work. If I get on my high horse and refuse to add any part of that certification, I can think of 6 or 7 other surveyors who would be happy to pick up the slack. I simply can't survive on 10% of my usual annual revenue.
You're lucky if you can dictate terms to your clients, and still have them as clients- I pretty much have to kiss butt (and ISAOA.)
I think you have it backwards. You need to educate those who are asking as to why you can't do it. I have quoted from and sent copies of Mr. Kent's columns to a number of attorney's and lenders, and only once met resistance. When the person's supervisor spoke with me they agreed that it is indeed an attempt to shift liability and the "problem" disappeared.
I don't understand why so many are content to be lemmings - all you have to do is explain your reasoning. If you can't do that you might want to consider another field.
Speak with your E&O agent about such things. See how much additional unnecessary liability they are willing to cover.
Frank, the certifications only apply to contract liability. An action for professional negligence (malpractice) can be brought by anyone who can show damages and a the required link of cause. The reason for attorneys asking for additional names and assigns, etc. under the certification is that statutes of limitations are now generally longer for contract actions than that for malpractice. Malpractice is usually both a higher threshold to prove and a shorter period to do it in. Certifications make it easier to find something that will stick and a longer period in which to make it stick or get a settlement from E&O from everyone who had any connection with the deal. It's more of a business/legal/insurance money making deal than anything to do with how good the survey might be. E&O insurance attorneys know that even a poor litigation attorney can bill days of cross exam on the contract promises under an ALTA survey because there is so much there. E&O is going to have to settle the claim (rather than defend it) if the party is named in the certifications. It is not a question of standing by the work you perform. I know it's hard to stomach, but it's the way things are.
So, one should get informed and play the game as well as possible. If surveyors as a group do not do that, then yes the attorneys will always look around and find the next surveyor who recently got licensed and needs the work and will give the extra certifications for free.
Duane,
This is very interesting and informative. Wouldn't the certification be a result of a survey work though, and thus limited to the statute of limitations of surveying? Not arguing the point, just asking.
