I should understand this ILC stuff better since people argue about this all the time, but I still do not quite get it. According to his description, "An ILC differs from a survey in that the ILC simply identifies the location of the property improvements (buildings), encroachments, and easements, but it is not evidence of the exact boundaries of the property".
Since we do not do these, I fail to grasp what exactly these do for a title company. Doesn't a surveyor put a boundary on the map? And what kind of notes do the surveyor, as well as the title company that gets one, place on them when presenting them to the client?
"An ILC differs from a survey in that the ILC simply identifies the location of the property improvements (buildings), "encroachments, and easements, but it is not evidence of the exact boundaries of the property."
Now that's funny!
It didn't really seem that heated of a discussion. If you want heated....(smiling here) you should have on the conference call I just had with our realtor. I think for the second night in a row he is having a bit of trouble sitting down.
Here in Florida, it seems that most realtors & title insurance providers try to avoid surveys at all cost. We have a law that certian exemptions have to be removed from the title insurance policy if a survey is provided, so a survey increases the title company's liability, plus, if the survey shows problems, and the buyer walks, the title company loses out on their fees.
Realtors see a survey as one more thing that can screw up their closing/commission ...
It's too bad that those two parties probably have the most influence over the buyer, when there seems to be a conflict of interest.
Lenders in Florida require a survey to remove the title company exemptions, but they'll pretty much take any old survey, regardless of age, if the owner signs that "no changes" have occured since the survey. And really, what does the lender care, they sell their loans to Wall Street.
We have not done a mortgage survey in a long time. Here is my take on a mortgage survey or an ILC. In a normal sell/loan, no knowledgeable person examines the property on the ground regarding legal/boundary/easement/encroachment issues. The surveyor, without necessarily doing a full blown survey, does enough research and enough surveying to guarantee to the lender/buyer there are no apparent "issues" to get concerned about. Often a few quick rough measurements and good research will accomplish this. We always tied enough of the boundary, usually everything we could find, to satisfy us there was no boundary issues. Often we did a boundary survey without setting the missing corners. I don't know how many times I offered to the buyers something like...for another $50.00 I will set the missing corners, and got turned down. Often I went ahead and set them anyway unless they were off the side of the mountain in a brier patch or something. We also checked very carefully for any setback or easement issues.
Bryan Taylor...since I'm licensed and have worked in both California and Colorado, maybe I can help you with trying to understand ILC's in Colorado. The ILC i.e. Improvement Location Certificate is a scam written into the Colorado Statutes so as to allow a Colorado licensed surveyor "familiar and with knowledge of where the boundaries are" perform and prepare an ILC. As each state is different, in Colorado this is utilized by mortgage companies and lenders as proof of a house, improvements etc. being contained within a designated or legally described area without the benefit of a full boundary survey. In California, I have never seen the requirement of a ILC or similar "Mortgage Buster" type surveys to insure to the lender that the "house is on the lot". Mainly because in California the survey requirements and overview by different local city and county governmental agencies involved in the preparation of subdivisions and parcel maps, zoning requirements, building permit processes etc. make it hard to locate a house on the wrong lot. I'm getting on a rant here and need to quit...Hope this helps.
Pablo
thanks, I kind of get the concept, since perhaps in Colorado and other states, people can build on parcels with a lot less stringency than I am used to here. As you mention, it would be pretty damn hard to build on the wrong lot and thus the ILC concept seems alien.
ILC's and Mortgagee Title Inspections are weird things, yet they serve a variety of purposes to the entire transaction.
The main thing supplied by the surveyor doing an ILC is verification of: 1) such a tract does exist; 2) a completely disinterested party is verifying as of a specific date that structures of defined dimensions and relative position do exist on or near the tract that exists; 3) the title company and lender have a pretty picture in a file folder that they can copy and forward to future owners of the loan (secondary mortgage activity) as proof that something did exist once upon a time.
The mortgagee title inspection goes a bit further and draws in the record location of record easements and comments on flood zone status. Showing the easements can easily point out the likelihood of encroachments.
In both cases, if the arrangement and sizes of the structures suggests there is no way they can fit on the record property, this may trigger a demand for a true boundary survey to include the showing of everything pertinent. In one case, we had a house that was 48 feet wide on a 45-foot tract.
the Land Surveyor is barking up the wrong tree.
A business model that relies on the real estate sales industry to sell your service to a third party (the actual property purchaser) won't ever work very well.
It's much better to sell the service to the property buyer direct but that would take public education which, frankly, has not been the land surveying profession's strong suit.
You have to hand it to the Realtors, they've done a fantastic job of convincing the public to give them a huge chunk of the transaction for essentially selling used houses.
I'm not sure why the colorado ILC is being ripped on; take for example the New Mexico document called the ILR - Improvement Location Report, that by state law states that it is not a survey and moreover states it is not to be used by the home owner, and the average fee for an ILR is $500
Improvement Location Report:
An Improvement Location Report is a report, accompanied by a sketch which is issued only to a title company, abstract company, escrow company or a lending institution for their exclusive use in determining such things as insurability or value of a tract of land. It shall not be represented by the surveyor as being a property boundary survey. "THIS IS NOT A SURVEY FOR USE BY A PROPERTY OWNER FOR ANY PURPOSE."
http://rainssurvey.tripod.com/sitebuildercontent/sitebuilderfiles/800deming-model.pdf
I often compare the ILC's Maine cousin, the Mortgage Loan Inspection, to a gym physical -- it's a quick, cheap exam to help the title insurer determine whether a moderate risk is worth taking. It is not intended to find all the prospective problems, nor to even begin to solve them.
I can say that in doing them I have found oodles of major problems that would have gone undetected had there been no MLI.
the guy was/is a lender...something 'Wayne' seemed to miss as well
How can people be so ingrained in the notion that a survey is an unnecessary extra?
Particularly a lender?
It would be in the lender's best interests to make sure the property is surveyed - as the survey helps to protect the lender's investment as well.
Gunter:
Alas, the lender relies on the title insurer, and the insurer relies on the numbers -- they can write a check now and then and still come out (way) ahead.
It doesn't matter what the bank, title company or real estate agent want.
A State's BOR decide what is necessary for surveyors to provide.
In Texas, it is either a preliminary survey or a certified survey. Both require actual surveying, one is before completion and the other is after.
Well, it matters what the bank etc. want in that that determines whether the surveyor will provide anything at all.
> How can people be so ingrained in the notion that a survey is an unnecessary extra?
>
> Particularly a lender?
my pyschoanalytical skills are on hiatus for this weekend. However, real estate agents & lenders don't really act as advocates for their clients (though they may say they do). they're just doing their job, w/ little to no regard for protection of the public at large. a lender's no more likely to recommend that you have an attorney check over everything as he would be to recommend a surveyor be involved - though both are great ideas, albeit as expensive out-of-pocket costs to the buyer that add to the duration of the transaction. Its just business, there's nothing flummoxing about it. The general public should be the driving force for seeking their own protection, cuz it ain't gonna come from the other parties involved if it slows down or adds to the cost of doing business.
Actually to me the most interesting thing in this "heated exchange" is the first sentence, written by a lender: "We are seeing an increasing number of title companies requiring an improvement location certificate (ILC) before they will issue a title insurance commitment." Around here the demand for Mortgage Loan Inspections has ebbed further every year, and I suspect the number of claims has been slowly rising as a result. I wonder if the tide is turning?
here's hoping!
There is no one at a typical real estate closing looking out for the buyer. That is a defect in the way the system is set up.
