P-2. Amendment of Exception to Area and Boundaries

See Also: 5.30 Express Insurance ;
18.36 Surveys .
Exceptions: None
Bulletins: TX000013 Express Insurance: October 30, 1992;
TX000015 New Forms Effective January 1, 1993;
TX000030 New Rules and Forms; Effective August 1, 1995;
TX000054 Area and Boundary Exception;
TX000061 Commissioner's Order for 2002 Hearing.
Forms: TX Commitment T-7 ;
TX Title Company Disclosure for Residential Closings 1995 .
TX Residential Real Property Affidavit T-47

Use of Survey in Residential or Commercial Sales, Leases and Construction (P-2.a)

In either an Owner or Mortgagee Policy, when the Insured desires to have amended the exception as to area and boundaries, (i.e. Item 2 of Schedule B) to delete all save "shortages in area", a title insurance company may accept an existing real property survey and not require a new survey when providing area and boundary coverage if the title insurance company is willing to accept evidence of an existing real property survey, and an affidavit verifying the existing survey, notwithstanding the age of the survey or the identity of the person for whom the survey was prepared. If the transaction involves Residential Real Property, the affidavit verifying the existing survey shall be the Form T-47 Residential Real Property Affidavit. The policy to be issued shall cover the same land as described in the evidence of the existing real property survey. The Company may, if it considers the additional hazard insurable, amend such exception (the Company may waive the requirement of a survey in connection with the issuance of its Mortgagee Policy insuring the lien on a condominium unit), by indicating same in Schedule B of the policy or by endorsement as provided herein upon payment of the premium prescribed in R-16 in the case of an Owner Policy. The survey must be acceptable to the Company.

Comment: The rules define a current survey as evidence of a survey of any date, issued to any person brought current by use of an affidavit as to improvements and boundaries. This procedure applies to residential and commercial properties (and platted property) up to $5 Million. If a current survey is furnished and the area and boundary exception is amended, the Company may provide express insurance against enforced removal pursuant to P-39 if the Company's guidelines are met.(See discussion on T-19). The Title Company Disclosure for Residential Closings (1995) discloses the availability of area and boundary coverage. The commitment (Texas Title Insurance Information) also discloses availability of area and boundary coverage. Because of possible copyright issues, do not provide anyone with a photocopy of a survey, not another title company, lender or even another file. You may give out duplicate signed original surveys. You may note in a current file that you have relied on a review of a survey in prior file no. ______.

Residential Refinance, Affidavit in Lieu of Updated Survey (P-2.b)

This Sub-Section P-2.b. shall apply solely to transactions involving Residential Real Property in connection with a Mortgagee Policy issued on a loan to renew, extend or satisfy a lien already covered by a Mortgagee Policy. On transactions covered by this Sub-Section, the Company shall notify the borrower of the borrower's right to substitute a qualifying Affidavit in Lieu of an Updated Survey. Such notice shall be given: (i) when the application for title insurance is received; or (ii) when the commitment for title insurance is first issued. On qualifying transactions under this Sub-Section, the exception as to area and boundaries shall be amended to read: "Shortages in area" {subject to any additional exceptions, or express insurance coverage, deemed appropriate by the Company} provided that the following requirements are satisfied:
            1) The borrower provides to the Company an original, or legible copy of the survey {hereinafter the "Prior Survey"} performed in connection with: (i) the transaction under which the borrower acquired title to the Residential Real Property; or, (ii) a prior loan transaction by the borrower involving the Residential Real Property. The Prior Survey shall not be dated earlier than 7 years prior to the date of the Mortgagee Policy to be issued or performed for another person, unless the Company is willing to accept evidence of an existing survey in accordance with Sub-section-P-2.a.
            2) The borrower has actual knowledge of the physical condition of the Residential Real Property since the date of the Prior Survey.
            3) The Mortgagee Policy to be issued in connection with the current refinance transaction will describe under item "5" of Schedule "A" the same land described in the Prior Survey.
            4) The borrower executes an affidavit concerning the Residential Real Property stating that, since the effective date of the Prior Survey and up to and including the date of the affidavit, there have been no:
                 (i) construction projects such as new structures, additional rooms, garages, swimming pools or deckings;
                 (ii) changes in the location of boundary fences or boundary walls;
                 (iii) construction projects on immediately adjoining property(ies) which construction occurred near the boundary of the Residential Real Property;
                 (iv) conveyance or replattings or easement grants or easement dedications by the borrower.

Comment: This rule requires acceptance of surveys dated within 7 years of a mortgagee policy covering a refinance on residential real property if the owner executes an acceptable affidavit. We will accept copies of surveys of any date for mortgagee policies on residential refinances if the borrower executes an acceptable affidavit. We are willing to provide express insurance as to encroachments on the Mortgagee Policy if our guidelines are met.

 c. A title insurance company may not discriminate in providing area and boundary coverage in connection with residential real property solely because: (1) the real property is platted or unplatted; or (2) a municipality did not accept a subdivision plat in relation to the real property before September 1, 1975.

 d. A title insurance company may not require an indemnity from a seller, buyer, borrower, or lender to provide area and boundary coverage.

 e. If an affidavit is provided to the Company pursuant to this Rule and the affidavit is incorrect, whether due to the negligence or intentional act of the affiant, the area and boundary coverage given pursuant to this Rule shall be unaffected and in full force and effect; provided, however, the exclusions contained in the policy shall not be affected in any way.

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