Make land survey part of any deal
Excerpt from an article by Bob Aaron
Does title insurance eliminate the need for a land survey?
When Joe and Gloria signed an agreement to buy their house in Scarborough this summer, their real estate agent inserted this clause in the document:
“Seller agrees to provide at his own expense an existing survey of the above-mentioned property within three banking days from acceptance of this offer.”
That was in mid-August, and closing was scheduled for the end of September. In my initial letter to the sellers’ lawyer, I requested a copy of the survey which the sellers and their real estate agent neglected to provide by the deadline.
After some prodding, the sellers’ lawyer finally responded in late September that his clients did not have a survey and I should rely on the Reference plan (R-plan) registered on title. I’m not sure whether he was paying any attention to the file, but I responded politely that there was no R-plan on title and I was still expecting him to deliver a survey.
He then advised that his clients couldn’t find a survey and were prepared to offer $500 instead. I knew that there was a survey in existence since the house had been built in the late 1980s and all properties of that vintage were surveyed during construction.
Why was I insisting on a survey, especially when my clients were buying title insurance?
In everyday terms, a survey resembles a one-dimensional, overhead line drawing of a parcel of real estate. It shows the full measurements, corners and boundaries of the property.
Technically known as a surveyor’s real property report, it is prepared by an Ontario land surveyor using calculations taken on the ground and compared with the registered title.
It reveals the location of the buildings on the land in relation to the lot lines, along with improvements such as fences, hedges, pools, overhead wires, easements and rights of way in favour of neighbouring owners or utility companies. It also tells whether the deed, in fact, describes the property accurately.
It shows where the property is located in the subdivision, what the buyers are getting, and more significantly, what they are not getting. In my opinion, a survey is the most important document in a real estate transaction — even more important than the deed.
Unfortunately, with the increasing popularity of title insurance in recent years, industry stakeholders have tended to view title insurance as a replacement for the survey.
The truth is that title insurance does not eliminate the need for a survey, or its value in the transaction.
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Bob Aaron is a Toronto real estate lawyer. He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818. Visit the column archives at http://www.aaron.ca.