Many misconceptions exist regarding Mortgage Location Surveys. Assumptions are sometimes made on the part of the Homeowner, the Title Company and/or the Lender as to what the purpose of the Mortgage Location Survey (MLS) is, and what it can and can’t be used for. What exactly are the Surveyors doing in the field? A broad range of beliefs exist from assuming the Surveyor is merely “driving by the site” to assuming that the Surveyor is determining the boundary lines of the site and setting stakes at the property corners. In actuality the truth lies somewhere in between. I hope this article will shed some light on the preparation and purpose of Mortgage Location Surveys.
Why perform a Mortgage Location Survey?
The primary purpose of a MLS is to verify that the legal description being used to transfer the property agrees with what is found in the field. To accomplish this, the Surveyor must prepare a MLS using the legal description provided by the Title Company, not by address. From the legal description the Surveyor prepares a sketch of the property described. Once on site the surveyor can use several methods to verify the actual location and shape of the parcel. By using monumentation in the street, or locating the property corners set in a previous Boundary Survey, the Surveyor can determine the location of the parcel. At this point the Surveyor can locate any improvements and/or encroachments that affect the parcel, as well as any easements or building lines that may affect the value of the property. Easements and building lines are shown on a survey if they are shown on the recorded plat, or if a description is provided by the Title Company.
Surveyors performing MLS are not simply “house measurers”; they need to determine the approximate boundaries of the property within the minimum requirements of OAC 4733-38 (minimum standards for Mortgage Location Surveys). The assumed accuracy of a MLS is +- ft. unless stated otherwise on the drawing.
Finally, a MLS may assist the Title Company in identifying errors in previous deeds. Many times courses are accidentally omitted, “typos” are made and wrong deeds are filed. The Surveyor is there to “red flag” any potential problems he might find in the field to provide a more complete picture of the property for the Title Company and Lender.
Why can’t a Mortgage Location Survey be used to make improvements on the property?
When performing a MLS the level of effort and precision used by the Surveyor does not meet the requirements of the Standards of Practice established by the Industry or the minimum requirements of OAC 4733-37 (minimum standards for Boundary Surveys). In other words, the Surveyor does not need to determine the same information about the property in the field when preparing a MLS as they would if they were performing a Boundary Survey. In determining the actual boundaries of a parcel, the Surveyor, as a Licensed Professional, cannot rely on the past work of others. If, for example, the Surveyor is able to locate a pipe, iron pin, or monument using a metal detector, he is obligated to observe and compare other points found with the adjoining legal descriptions to establish if the pipe is actually the property corner, or if it is in the proper location. This verification could take hours or even days; consequently the cost of a Survey to establish boundaries is significantly higher than a MLS survey. When a homeowner wants to make improvements on his property such as installing a fence or building a garage, a Boundary Survey should be prepared to maintain the integrity of the property. If a homeowner asks the Surveyor to point out the property corners in the process of preparing a MLS, the Surveyor cannot give his professional opinion on the boundaries because he has not done his due diligence in verifying those points.
A MLS can be a great tool for the Lender and Title Insurer to use in assisting a homeowner in purchasing a home. It can give them the necessary information to comfortably know that the property that is being transferred is in deed the property they wish to purchase. They will have a good overview of the parcel and the related improvements thereon. What they will not have is a representation of the actual property lines. Therefore, a MLS cannot be used to install a fence, build a house, garage, settle a dispute with a neighbor, or as evidence in a property dispute in a court of law.
If you have questions, please talk to your Surveyor. As professionals we are here to help!