Commercial Real Estate

Rod Unema

In today’s commercial real estate market, careful planning must be followed in order to complete a successful transaction. One of the critical steps in preparing for a transaction is obtaining a current survey of the property. In my career as a professional land surveyor over the past twenty years, the requirements for a commercial property survey have evolved from a relatively simple and sometimes vague standard to a highly detailed, nationally standardized checklist. The most widely used and recognized survey for commercial property is the “ALTA/ACSM Land Title Survey.” By definition, this is a survey prepared in accordance with the standards and requirements jointly developed and adopted by the American Land Title Association (ALTA) and the American Congress of Surveying and Mapping (ACSM).

The necessity for standardized survey requirements originated as title insurance companies required that in order to insure title to land without exceptions, certain information must be shown on the survey map. In order to meet the title companies’ requirements, surveyors must be furnished with specific information such as deeds of record and recorded easement documents. The two organizations (ALTA and ACSM) formed a joint committee to prepare a list of standards that were agreeable to both sides and provided the property owners with a consistent and quality survey. The first Standard Requirements were published in 1986, and have been updated several times, the most current being the 2005 Standards.

The current published Standards are separated into two sections. The first section lists the minimum requirements and information that must be shown on the survey to be acceptable in both completeness and accuracy. The second section (“Table A”) lists the optional survey responsibilities and specifications. With these optional items, the survey may be “customized” to meet the specific needs of both the buyer and the seller. A few examples of “Table A” items are: flood zone information, existing ground contours, or utilities serving the property. For the complete list of the minimum and optional requirements, go to the ALTA website: http://www.alta.org/industry/ALTA2005_Standards.pdf

Since the majority of commercial or industrial real estate transactions will require this type of survey, a professional surveyor should be contacted and an “ALTA/ACSM Land Title Survey” specifically requested. When ordering the survey, the following information should be furnished to the surveyor: 1) the legal description of the property (from a deed or title commitment), 2) a copy of the title commitment, if available, 3) the optional “Table A” items to be included in the survey, and 4) any specific certification language and/or requirements, as many lenders and national chain businesses have their own requirements in addition to the minimum ALTA standards. Once the surveyor has this information, an accurate estimate of cost and time of completion can be prepared. Every property is unique and the cost and timing of a survey will vary based on the acreage of the property, the existing improvements, the survey requirements, and weather conditions. ALTA surveys can range from less than $1,000.00 in one week’s time to over $50,000 with months to complete.

Once the survey has been ordered, the surveyor can proceed with the necessary research, field work, drafting, and preparation of the certification to complete the survey map. It is then reviewed by the buyer’s and seller’s attorneys, real estate agents, and the title company. During this process, it is common for some revisions, additions, or deletions to be made to the survey prior to the final closing on the property.

My experience over the years has convinced me that the “ALTA/ACSM Land Title Survey” is the right tool for most commercial and industrial property transactions. It is nationally recognized and accepted by lending institutions and title companies. The minimum standard requirements provide a consistent and dependable survey, while the optional “Table A” items allow the survey to be customized to meet the needs of the entities involved in the transaction. Commercial real estate transactions and surveys can be complicated; therefore, it is advantageous to work with a real estate agent or attorney for the details of the survey and title work. When ordering a survey, it is wise to check with two or three local surveyors for cost and timing estimates. It is important, however, to establish a good working relationship with a surveyor who will provide a quality job at a fair price. Standardized requirements and professional relationships will ensure a win-win situation for all parties involved in commercial real estate surveys.

Rod is the Survey Department Manager at Exxel Engineering, Inc. in Grand Rapids, MI. He graduated from Michigan Technological University in 1980 with a degree in Land Surveying, worked in Ketchikan, Alaska from 1980 to 1985, and at Exxel Engineering from 1985 to the present. Rod is a Licensed Surveyor in Alaska and Michigan. He is a member of the Michigan Society of Professional Surveyors, has served on the Ottawa County Remonumentation Committee and Peer Group since 1993, and is an affiliate member of Commercial Alliance or Realtors.