As a society, we influence many use restrictions and rights affecting properties. These include easements, restrictive covenants, special tax exemptions, zoning and use stipulations, building codes, curb-cuts, environmental laws, opportunity zones, property associations, historic districts and other property mechanisms that determine use rights and limitations.
The essence of the lyrics found in the song, “People Make the World Go Round,” by the early ’70s R&B group the Stylistics, exemplifies people’s varied perspectives and interests when it comes to shaping the world of real estate. It is a characteristic that makes the property research process increasingly more complex and critical when making the right planning decisions about business and development real estate.
While a variety of property information is available to us from governmental and private firms, real property title research and land survey information is fundamental to any subsequent research we may choose to pursue.
Fortunately, a complete information reconnaissance of real property today may not be necessary to accomplish the level of property understanding required by most people.
If you don’t currently own the subject property, a good first step would be to visit the county equalization department and/or the local municipal tax assessment department to obtain the tax I.D. and legal description for the property you want to identify for further research work.
Next, a title examiner can provide information regarding the ownership of the parcel (deed), legal description and other matters of record.
Title-related research can be invaluable with due-diligence matters, tax and zoning/use appeals, the appraisal and marketing of property, seller and buyer representation, and much more.
Let’s take a closer look at how specialized title and survey services can be helpful in making decisions about typical issues affecting business real estate.
A Title Search Summary (TSS), aka an “informational commitment” or “preliminary title work,” gives the complete picture of what’s happening with a parcel of land (developed or not) and provides the underlying supporting documents. It is provided at a reduced rate and provides the current vesting, underlying land contracts and/or leases, liens, easements, building and use restrictions, and any environmental matters of public record. This non-insuring product carries a work fee that varies based on the type of property being researched and could be credited toward a policy premium if it gets converted to an actual commitment for title insurance within one year of the initial issue date.
Lenders and attorneys often use a TSS so they know exactly what other matters may be affecting the subject property before they move ahead with the foreclosure process. Municipalities also order a TSS when they are contemplating doing work in, on or around a specific area for special projects where they need to see the complete picture of what is affecting the subject land. Commercial real estate agents order these as well so they are prepared to deal with any potential title-related issues well in advance of a closing. There are a number of other uses for the TSS, but the customers most frequently asking for them are lenders, attorneys, real estate agents, surveyors and developers.
Drawing a picture
Surveyors using a TSS often can locate and prepare a drawing of a critical item of interest within a property that is manifest in the TSS. This information is particularly helpful when locating an abstract property object, such as an easement. Physical as well as abstract points of interest can easily be isolated on a property drawing and then managed.
Examples of such objects of interest include a private drive or utility easement, a street-side commercial sign pylon, a proposed expansion to the existing building (maybe for an office or loading dock), and other improvements and use limitations or rights. All of these can be identified without the cost, time and detail involved in a full boundary survey.
For example, a developer would not want to expand an office area in a building without first determining if there are any conflicting property rights, such as a utility easement that runs across that part of the parcel.
Title and land survey professionals, working together, can help with those types of determinations.
Using a TSS, a surveyor also can determine the legal description of the property, its boundaries and whether it’s comprised of multiple parcels.
How many exceptions are listed in the TSS? How many of these affect the subject property? Without performing a field survey, the surveyor should be able to determine the location of any exceptions and/or restrictions.
Is the property burdened by any blanket easements? This type of easement is very common in conveyances to utility companies. An easement that permits a route of utility poles and wires across the property may burden the entire property. If so, the surveyor often can work directly with the utility company to release a portion of the easement and limit its effect to the line of existing poles and greatly reduce the burden on the property.
These are just a few examples of the insight you can gain when your surveyor reviews the TSS prior to committing to the time and expense of a field survey.
The subject matter of this article is for general purposes only and not intended for specific property applications. Talk to your attorney and other real property professionals; specialized title and survey services may offer you some practical business and development real estate options.
Fred Otterbein is an associate broker with Liberty Realty Corp. MI with four decades of experience in the areas of commercial, industrial, waterfront and special project real estate. Leeandra Dunn is a commercial title examiner with over 21 years of experience and is an associate owner of Transnation Title Agency. Brent Feyen, P.S., is the assistant survey department manager/project surveyor with Exxel Engineering Inc. and has over 17 years of experience as a professional land surveyor.