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The Survey Exception to Policies of Title Insurance

by Zip Edwards The Property Line, November 2015 11/10/2015

Diverging from the 1992 policies, the current American Land Title Association (“ALTA”) 2006 owner’s and lender’s policies include Covered Risk 2(c) which converts the standard “Survey Exception” to an affirmative coverage. Covered Risk 2(c) indemnifies the insured from loss or damage sustained by the insured by reason of “[a]ny encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land.” By adding this provision to the covered risks, per ALTA’s commentary on its forms, “the insured now has survey coverage for the first time, ‘absent a Survey Exception in Schedule B’”.

However, no need for too much excitement about this affirmative coverage, as the “Survey Exception” usually comes along as part and parcel of an owner’s or lender’s policy.

Zip Edwards co-authored "The Survey Exception to Policies of Title Insurance," which originally appeared in the The Property Line, the quarterly newsletter produced by the Real Property Section of the North Carolina Bar Association.

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