ALTA vs. Boundary Survey in a Commercial Closing

If you are using a lender in a commercial deal, most likely they are going to require a survey of the property. Most lenders require either (a) a Florida Form 9 endorsement to the lender’s title insurance policy, or (b) the general survey exception listed in schedule B-II deleted from the title policy and replaced with a specific survey exception, and both items require the title company to produce to the underwriter a valid and accurate survey of the land.

The main purpose of the survey is locate, describe, monument, and map the boundaries and corners of a parcel of land, and to detail any possible encroachments on the land. Most survey companies offer two basic types of surveys for commercial deals, often called a “Boundary Survey with Title Review” and an “ALTA Survey.” The ALTA survey is often more expensive than the boundary survey, and the title company will likely relay a message from the survey company asking which version of the survey the buyer would like to order. Both types of surveys are acceptable for the lender requirements above, so what is the difference between the two?  

Boundary Survey

A Boundary Survey establishes the boundaries of a parcel using the property’s legal description, and will usually detail permanent structures, easements, utilities, and encroachments. Boundary surveys are the basic form of survey that can be used to issue title insurance, and generally the boundary survey will be quite a bit cheaper than an ALTA survey. This is the most common type of survey in Florida, and unless anyone is specifically requiring an ALTA survey, this type of survey will allow you to purchase the property with a title insurance policy that meets the lenders requirements.

ALTA Survey

An ALTA survey must adhere to specific requirements as set forth by the American Land Title Association and the National Society of Professional Surveyors. ALTA surveys are highly regarded and meet the highest standards recognized throughout the country. The ALTA survey is much more in-depth than a boundary survey, and oftentimes will be specifically requested by the lender or someone with a financial interest in the deal. If you are looking to purchase a piece of commercial property, the ALTA survey may be more desirable because it will give you a much more in-depth view of the property to truly understand your development plans for the property.

Should I order a Survey if a Lender does not request one?

YES! If you are purchasing a property, you should order a survey to make sure that you fully understand the land that you are purchasing. Easements and other items on the land can significantly affect the value of the property because they may restrict your rights and ability to develop the subject property. By obtaining a survey, you will have a better idea of whether the property you are purchasing is worth the price that you are ready to spend.

Relevant Links:

The Florida Standards for a boundary survey can be found here: https://www.fdacs.gov/content/download/21300/file/5J-17.052.pdf.

The standards for an ALTA survey can be found here: https://cdn.ymaws.com/www.nsps.us.com/resource/resmgr/alta_standards/2021_Standards_20201030_grk.pdf.