ALTA/ACSM Land Title Surveys - This just in from Gary Kent

Following is a report on what has transpired over the last two years since the 2011 standards were adopted by ALTA and NSPS and became effective on February 23, 2011.  It is fairly long, so I apologize ahead of time.

I have attached a list of the suggestions that have been made so far for the next version (likely dated 2016)).  As I have always said – if a suggestion is made, it gets on the list - it does not matter if I think it is a good suggestion or a bad one.  So, the attached list is simply the raw input; I offer no personal comments or perspectives at this time.

There have also been a few issues that have arisen with respect to the 2011 standards that I want to alert everyone to.

• Table A item 19 – Wetlands.   We need to modify the language of this item to more clearly reflect what was intended.  What it was TRYING to say was simply this:  If someone who is qualified to delineate wetlands has been out on the property and has marked their opinion of where the wetlands are, and if the client would like the surveyor to locate those delineation marks and show them on the survey, then they should check this item.  The surveyor makes no comments and offers no opinions as to whether the delineations actually represent a wetlands; he or she is simply showing the marks on the survey.  In fact, the marks should be identified either on the survey or with a note as to the source (i.e., who set them, if known).  It appears, however, that those persons selecting Table A item 19 somehow think the surveyor is going to miraculously turn into a wetlands biologist.  That was not the intent, and very, very few surveyors would be qualified to delineate wetlands anyway.  It is my suggestion that if someone checks off Item 19, the surveyor should clarify ahead of time what he or she is going to do as a result.
• Table A items 6a and 6b:  In 2011, ALTA and NSPS decided that the title company should provide the zoning information to the surveyor pursuant to this item.  What we have found, however, is that in general title companies do not want to do this.  Without going into great detail at this time as to why, after being educated on the issue, I understand their resistance.  My suggestion is that if Table A item 6a or 6b is checked off, the surveyor should clarify ahead of time that the title company may not provide the information and ask the client how they would like to proceed:  “Pay me to do the research?” or “Pay me to hire someone to do the research?” etc.  Some surveyors are reacting by simply ignoring the item if the information is not provided.  I do not see this as particularly helpful or professional; we should be part of the solution, not part of the problem, so let’s discuss it ahead of time and decide how to deal with it.  To those who would say that they can ignore it because it requires that the information be provided, I would remind you that Table A items are negotiable, so some modification of the item can be made.
• Section 4 – Records research:  With the 2011 standards, it was agreed between ALTA and NSPS that the title company should provide copies of adjoiner descriptions to the surveyor.  As with the zoning issue in Table A item 6, the title companies are sometimes resistant to providing those adjoiner deeds.  Again, I understand why, but am not going to go into that here.  The bottom line, however, is that in virtually every state, surveyors are responsible for pulling adjoiner deeds and reviewing those deeds - indicating gaps, overlaps or contiguity.  The fact that we were foisting the responsibility of pulling those deeds off on the title company was merely going to be handy for the surveyor; it ultimately cannot replace state laws or administrative rules.  So if the title company does not provide them, it does not relieve surveyors of doing the research themselves.  And again, this is not a violation of the item; Table A items are negotiable, so address this issue up front and request compensation for the additional work if appropriate (remembering that you actually have to do it anyway under your state’s laws).
• Section 7 Certification:  To the credit of the surveying community, virtually every private lender in the U.S. has acquiesced to using (only and unaltered) the Section 7 certification.  The only entities I am personally aware of that are continuing to resist this and insist on their own are HUD Multi-family, Fannie Mae and some state housing authorities that are somehow connected with HUD.  My suggestions on how to deal with this issue are these:

o   Some of HUD offices are flexible and will actually allow the surveyor to use only the ALTA/ACSM Section 7 certificate.  I know this from personal experience and others (including at least one HUD employee) has told me the same thing.  Alternatively, however, some HUD offices are not flexible.

o   There are no regulations that can be used to tell surveyors they ‘must’ use any certificate - other than as may be mandated by a state board or statute.  Surveyors are licensed by their respective states and must comply with their state's laws and the normal standard of care.

o   In some states, the state law specifically invokes the ALTA/ACSM Standards.  In all cases, I personally believe that the normal standard of care would require that the surveyor follow a current, nationally-recognized standard and accompanying certification.

o   Having said all of that … the ALTA/ACSM Standards MANDATE the Section 7 certification and the surveyor MUST use it on the face of the survey. So, how does a surveyor deal with an obstinate attorney?

o   The surveyor could provide the HUD certificate on a separate sheet (company letterhead, for example), that cross-references to the survey. That way HUD can have their certificate, but the survey will show the Section 7 certification as mandated by the standards. In my experience, this is often grudgingly accepted.

o   Another option is for the surveyor to go ahead and put the HUD certificate on the face of the survey - but then any reference to the 2011 ALTA/ACSM Standards must be removed from the plat/map because it no longer complies with these copyrighted standards.  That is usually not acceptable for several reasons.

o   I do know from personal experience if the surveyor simply refuses to use the certificate - citing state law, common law and/or the normal standard of care -  there will be moaning and groaning and threats, but the loan will likely close. (Which only proves what surveyors already know – the Section 7 certificate adequately protects HUD). 

o   The HUD "Surveyor's Report" (which is also part of a HUD survey) is, if one takes the time to read the standards, and if the appropriate Table A items were selected, completely and inexplicably redundant, given that the Section 7 certification has the surveyor certifying that the survey was made in compliance with the standards. If you do use it, I would be very cautious in how you fill it out.  Stating, for example, “None” in response to a particular question is an express guarantee which will not be covered by any errors and omissions insurer if it turns out to be wrong.  “None observed” is better, if that is, in fact, the correct answer.  Otherwise, state the facts that were observed and do not make any express statements beyond your personal knowledge; you will have no Errors and Omissions coverage otherwise.

o   With regard to HUD being a federal agency (some attorneys like to invoke that fact as justification for forcing the surveyor to use the HUD certificate) …  that that has nothing to do with the Surveyor's professional obligation to comply with state laws, standards and the normal standard of care. 

o   Some attorneys will point to Section 3.B. of the Standards as justification for the surveyor being required to use the HUD certification; however, that is incorrect.  HUD is a federal agency with its own survey standards, but it does not "regulate the practice of surveying" as do the entities that 3.B. is specifically addressing (as noted above, some state boards require that the surveyor include certain wording in their certificates). 

o   Table A item 12 is also sometimes pointed to as justification.  As primary author of the standards and chair of both the ALTA and the NSPS/ACSM committees and, I can state categorically that Table A item 12 was definitely not intended to be able to trump the very clearly stated intent of Section 7, although I suppose there is nothing to prevent a surveyor from reading it that way.

o   Ultimately, however, the surveyor – when faced with an obstinate attorney – will have to make a business decision regarding certification.

• Table A item 21 – Professional Liability Insurance:  if this is checked, the surveyor has no obligation to put anything on the face of the survey other than to indicate in the certificate that the survey included Table A item 21.  Some attorneys are saying that the surveyor must list their coverage on the face of the survey; I would categorically refuse to do this and it is not required.
• The title “ALTA/ACSM” now that ACSM “does not exist.”  ACSM was merged into NSPS, it did not ‘disappear’ and the name ACSM is now owned by NSPS. There are no legal issues related to the name ALTA/ACSM as some have expressed concern about.  In reality, ACSM has not been a party to the standards for 3 or 4 versions now; responsibility for the standards was turned over to NSPS a number of years ago.  Up until now, the name ACSM was kept in the standards because it is a recognizable, 50 year old “brand” when it comes to the standards.  Whether the name remains the same going forward because of the recognized brand, or whether the standards become identified as “ALTA/NSPS” remains to be seen.  The two organizations will have to collectively agree to any name change.  I do know that there are people in positions of authority in NSPS who differ on this issue.
• ExpressMap™:  This product has been offered by First American for over 10 years, it is not a new development.  ExpressMap™ was likely a response to market pressures (mostly from lenders) looking for faster and cheaper alternatives to a survey.  Remember that title insurance is a business – they are in the business of insuring title – and like the rest of us, they weigh the risks of doing certain things.  First American has apparently determined that in some cases, the risks they incur by relying on an ExpressMap™ (a self-described internal risk-management tool for use in removing the standard survey exception without a survey) are worth the reward of satisfying lenders who might otherwise take their business elsewhere.  Notwithstanding all of that, what the surveying community can do is beat the drum and point out that ExpressMap™ is not a survey and that - while First American will ostensibly cover unforeseen problems that were not disclosed by the ExpressMap™ process - buyers and buyers’ attorneys, should be interested in knowing what those problems might be ahead of time, so they can assess the associated risk.  And that can happen only with an ALTA/ACSM Land Title Survey.  Whether ExpressMap™ is unlicensed practice is a state-by-state issue – there is no federal licensure of surveyors – so if you think it is unlicensed practice in your state, by all means file a complaint.  In the meantime, NSPS is closely monitoring this issue and will contact First American to discuss ExpressMap™ if it is deemed appropriate.

We have been trying to hold committee meetings in conjunction with the NSPS spring and fall meetings, but with little success.  So many meetings take place in so little time that there are many conflicts.  It also it seems that there is relatively little interest in attending an ALTA/ACSM standards committee meeting during the “down time“ between when we last adopted a set and when we start actively working on revisions (which will probably be in the fall of 2014).  Regardless, if you see that a committee meeting is being held during the NSPS spring or fall meetings, please feel free to attend.

The committee welcomes your input, so if you have suggestions, please send them to me, although I would suggest respecting everyone’s time and NOT hitting “Reply All.”

Thank you and I hope this finds each and every one of you well.

Gary