Page 46 —
COLORADO REAL ESTATE JOURNAL
— June 1-June 14, 2016
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because the objections may give the
other party a way out of the contract.
Later installments in this series of
articles address contract termina-
tion in more detail.
n
Reviewing the new sur-
vey.
An ILC or survey is, at
least for the lawyer and the title
insurance company, the primary
“eye” for viewing the property.
Reviewing an ILC or survey is an
exercise in detail. An important
part of the review is to determine
that everything that is shown
on the new survey matches up
with the recorded documents
shown in the title commitment.
That involves, first, determining
that the ILC survey shows every-
thing it is supposed to show
based on the requirements for
an ILC or the type of survey you
ordered. It includes matching
up the legal description in the
vesting deed and the title com-
mitment with that in the ILC or
survey (both the words and by
what is shown on the drawing).
It involves determining that all
rights contained in the exception
documents in the title commit-
ment (e.g., easements) are shown
(though they might not be on
an ILC. It also involves exam-
ining that all improvements
that are supposed to be on the
property are shown (and that
none that are not supposed to
be there are shown) and look-
ing for encroachments (things
that shouldn’t be where they are)
and other conflicts betweenwhat
is on the ground and what the
recorded documents provide for.
Bock & Clark, a national sur-
veying firm has an excellent
Handbook for ALTA/ACSM
Land Title Surveys available
online at:
clark.com/EducationTools.aspx.
The handbook also includes
valuable suggestions and check-
lists for ordering and reviewing
a survey.
n
Making objections to the
new ILC or new survey. Tip:
If the buyer is lodging a survey
objection, the buyer should do so
clearly and by stating objections,
not just requests.
A survey objec-
tion is often written as a series
of requests to the seller or the
title insurance company, with-
out clearly stating that the buyer
objects to the title matter. Per-
haps the buyer is trying to hedge
its bets by not clearly making
an objection. This is not a wise
approach.
Trap:
If the buyer makes
requests without calling them objec-
tions, the seller ignores them and the
buyer does not then withdraw them
before the title resolution deadline,
the contract may automatically ter-
minate.
The buyer needs to know
in its ownmindwhat is and is not
an acceptable title matter since
the contract forces the buyer to
decide what title matters are deal
breakers if they remain. Similar-
ly, the seller needs to decide what
title objections it will not fix even
if it means losing the deal.
Trap:
The contract is somewhat
unclear as to whether the buyer
is deemed to have accepted every-
thing shown in the new ILC or
new survey to which the buyer does
not timely object.
Section 9 does
not have a clause parallel to the
last sentence of each §8.2 and
§8.3, which makes clear that the
buyer accepts title subject to title
matters disclosed to buyer, or
of which the buyer has actual
knowledge. Section 13.3, howev-
er, states that title to the property
will be conveyedsubject to“those
specifically described rights of
third parties not shown by the
public records of which buyer
has actual knowledge and which
were accepted by buyer in accor-
dance with off-record title and
new ILC or new survey,” sug-
gesting that the same principle
applies. Accordingly, it is critical
that the buyer examine the new
survey carefully to determine
whether any “rights of third par-
ties” are shown. Sometimes such
rights are shown on a survey in
an indirect way, such as by an
encroachment of improvement
from an adjoining property, by
a dirt track that extends onto
adjoining lands or by a neigh-
bor’s fence that encloses some of
the property.
Tip:
Complete the survey review
early enough so that the buyer can
find out what changes the surveyor
is willing to make to the new ILC or
new survey and what endorsements
the title insurance company is will-
ing to give to insure over encroach-
ments or other troubling matters
shown on the new ILC or new sur-
vey.
Unfortunately, that is not
always feasible within the time
allowed by the contract. If the
buyer resolves issues with the
surveyor and the title insurance
company before the new ILC or
new survey objection deadline,
the buyer is able to lodge fewer
survey objections to the seller.
Fewer objections means less time
wasted in negotiation and less
opportunities for the seller to
terminate the contract. The buyer
can object to only those mat-
ters that require the seller to do
something about the new ILC or
new survey that the buyer really
wants and has not succeeded in
resolving with the surveyor and
the title insurance company.
s
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