Q&A: Survey Exception
You are are issuing a Commitment for an Expanded Protection loan policy on a SFR and the lender has asked for an affirmative coverage endorsement which contains the following language: “Policy insures against loss or damage by any violation, variation, encroachment, or adverse matter that would have been disclosed by an accurate survey.”
Question: Can this language be provided and if so, is there an additional charge?
Answer: Yes, you can provide that language because it is already in the Expanded Protection policy! See Covered Risk #2(c) excerpted and highlighted below. There is no additional charge.
COVERED RISKS
1. Title being vested other than as stated in Schedule A.
2. Any defect in or lien or encumbrance on the Title. This Covered Risk 2 includes but is not limited to insurance against loss from:
(a) a defect in the Title caused by
(i) forgery, fraud, undue influence, duress, incompetency, incapacity, or impersonation;
(ii) failure of any person or Entity to have authorized a transfer or conveyance;
(iii) a document affecting Title not properly created, executed, witnessed, sealed, acknowledged, notarized, or delivered;
(iv) failure to perform those acts necessary to create a document by electronic means authorized by law;
(v) a document executed under a falsified, expired, or otherwise invalid power of attorney;
(vi) a document not properly filed, recorded, or indexed in the Public Records including failure to perform those acts by electronic means authorized by law; or
(vii) a defective judicial or administrative proceeding.
(b) the lien of real estate taxes or assessments imposed on the Title by a governmental authority due or payable, but unpaid.
(c) any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land. The term “encroachment” includes encroachments of existing improvements located on the Land onto adjoining land, and encroachments onto the Land of existing improvements located on adjoining land.