Joint ALTA/ACSM & Zoning Due Diligence

Smith-Roberts National Corporation & The Planning & Zoning Resource Corporation 1

ALTA/ACSMLand Title Surveys

&Zoning Due Diligence

Presented by

Cliff Stout, PLS & David Anderson, PLS


What is a Land Surveyor?

Every state requires that surveyors be licensed.

8 hour Fundamental Examination 6 hour Principles and Practices Exam 2 hour State Law specific exam

Each state has independent regulatory board which oversees the professionNCEES is the National Examination Board

www.ncees.org

http://ncees.org/


Standard of Care & Liability…"the degree of care a reasonable prudent practitioner should exercise in the locality of practice.“ 1 Surveying and Land Information Systems, Volume 50, No. 4, 1990, pp. 267-270

Liability Insurancepolicies contain exclusions for claims arising out of express guaranties or warranties “true and correct" or "true and accurate" are comparable in meaning to guaranty problems arise when a surveyor executes a certificate which contains statements beyond his/her professional knowledge


Legal Descriptions

United States Public Land Survey SystemRectangular/Grid System

Metes and Bounds SystemOriginal 13 ColoniesSome Southern StatesTexas and Hawaii

Platted Subdivisions – Lot & BlockSimultaneous ConveyanceDo Lot & Block Descriptions need to also be described with Metes and Bounds Descriptions?


Rectangular Survey System


2005 Minimum Standard Detail Requirements


What is a Base ALTA?

Dimensions of Property (5a)All elements of each curve, if any (5a)Difference in Record & Measured dimensions (5b)Evidence of access to public streets (5c)Names and recording data of adjoining landowners of non-platted lands (5d)Recording Data of subdivision plats if adjoining lands are platted.Contiguity, gores and overlaps along the exterior boundaries (5d)


What is a Base ALTA? cont’d

Character of all evidence of possession (fences, walls hedges, etc) (5f)Location of Buildings (5g)All record easements as provided to surveyor (5h)Observable Evidence of Easements (5h)ALL visible improvements within 5 feet of boundary (5i)Driveways across property (5j)Required ALTA certificate (8)

Billboard Signs Indicates use by others


What is Table A?The items of Table A must be negotiated between the surveyor and client. It may be necessary for the surveyor to qualify or expand upon the description of these items, e.g., in reference to Item 6, there may be a need for an interpretation of a restriction. The surveyor cannot make a certification on the basis of an interpretation or opinion of another party. Items 16, 17 and 18 are only for use on projects for the U.S. Department of Housing and Urban Development (HUD).


1. Monuments

Helps to locate property boundaries in the future Not all states require Additional costs if requested Some corners cannot be set


2. Vicinity Map

Orients to major intersections

Can show off site easements


3. Flood Zone Statement

Determines if Flood Insurance is required

References the FEMA map


Flood Hazard ZonesFEMA Flood Insurance Rate Map (FIRM)

Depicts Special Flood Hazard Areas (SFHA)100 year Flood?

Zone B, SHADED X, C, and X Areas of moderate or minimal hazard Flood insurance is available in participating communities but is not required

Zone A Subject to inundation by the 100-year flood Mandatory flood insurance purchase requirements apply

Zone AE Subject to inundation by the 100-year floodBase flood elevations are shown within these zones Mandatory flood insurance purchase requirements apply


4. Land Area

Helps determine if all of desired property is surveyed Area to be determined by client Usually not insurable


5. Contours & Datum

ONLY needed for Elevation Certificates NOT necessary for most transactions Usually NOT requested


6. Zoning Restrictions, etc

Show current setbacks Show height Restrictions Show Floor Space

Restrictions (bulk) Setbacks from recorded plat

(a Title but not a Zoning issue, similar to deeded setback and parking requirement)

SURVEYORS CANNOT CERTIFY COMPLIANCE


7(a) Exterior Dimensions of Buildings

Without this item, buildings are only shown visually, not dimensioned

In some cases an overall length and width will suffice (very intricate buildings)


7(b) Square Footage

If this item is checked, there are up to three (3) subcategories that should be requested


7(b)(1) Exterior Footprint

This is the area that the building occupies on the property Used for bulk density calculations NOT the same as square footage from rent rolls


7(b)(2) Gross Floor Area

Surveyor must be provided with floor plans Used for calculation of parking space

requirements Should correspond with the rent rolls Usually not requested


7(b)(3) Other Areas

Landscaped area, if required by restrictive covenant

Permeable area, if specified in the zoning Be specific if you check this item


7(c) Height of Buildings

Used mainly for zoning compliance Feet AND number of stories


8. Visible Improvements

Without Item 8, only buildings are required to be shown

Paved areas, signs, swimming pools, etc.


9. Parking Areas

Used mainly for zoning compliance Parking Stripes Required Number ?


10. Access to Public Road

Allows title company to insure access Direct or Indirect access Physical access vs. legal access


11. Location of Utilities

Confirms that property has access to public utilities

Confirms that visible utilities enter or exit though public easements or rights of way

Is there a need for appurtenant easement across others?

Indication of unrecorded easements

Two subcategories of Item 11


11 (a) Observed Evidence.

Only visible evidence of utilities:

Manholes, power poles, transformers, fire hydrants, drain inlets, etc.

For example, location of sewer lines between manholes will not be shown.


11 (b) Observed Evidence & Plans.

Plans provided by client, utility companies and other appropriate sources.

For example, city utility plans (WHEN AVAILABLE)

This does not require surveyor to utilize the “One Call” system


12. Governmental Agency Requirements.

HUD Requirements Additional FANNIE MAE Requirements not

otherwise covered in Table A Usually not requested


13. Names of Adjoiners / Platted.

Non-Platted adjoiners are already required by base ALTA. Adjoiner deed information to be provided by client. Needs to be negotiated in original survey order.


14. Distance to Nearest Intersecting Street

• Specific street intersection request to be specified by client.


15. Use of Orthophotography

Useful in certain situations where large areas are involved without many improvements.Boundary is done using traditional methods.Field location of Improvements varies with each situation.Potential encroachments should be field verified.


16. Earth Moving and Construction

Evidence of possible lien rights FOR USE ON DEPARTMENT OF

HOUSING AND URBAN DEVELOPMENT (HUD) PROJECTS ONLY


17. Changes in Street Rights-of-Way

Completed OR proposed Indicates possible additional right-of-way

takings Documents are typically not of record FOR USE ON DEPARTMENT OF



18. Solid Waste Dump

Only visible evidence can be located FOR USE ON DEPARTMENT OF



19. Other

Client specific requests Usually not requested


Comprehensive Certificate Language


Comprehensive Certificate Language

SURVEYOR'S CERTIFICATE

[Insert Date]

This survey is made for the benefit of:

Title company, lender, seller, buyer and their respective successors and assigns

I,____________________________, Professional Land Surveyor do hereby certify to the aforesaid parties, as of the date set forth above that I have made a careful survey of a tract of land described as follows:

[Insert Property Description]


Comprehensive Certificate Language (cont’d)

1. This is to certify that this map or plat and the survey on which it is based were made in accordance with the "Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys," jointly established and adopted by ALTA and NSPS in 2005, and includes Items 1, 2, 3, 4, 6, 7(a)(b1)(c), 8, 9, 10 and 11(a)of Table A thereof. Pursuant to the Accuracy Standards as adopted by ALTA and NSPS and in effect on the date of this certification, undersigned further certifies that in my professional opinion, as a land surveyor registered in the State of __________, the Relative Positional Accuracy of this survey does not exceed that which is specified therein.



2. The accompanying survey was made on the ground and correctly shows the location of all buildings, structures and other improvements situated on the above premises; there are no visible encroachments on the subject property or upon adjacent land abutting said property except as shown hereon and was made in accordance with laws and/or Minimum Standards of the State of __________.



3. The property described hereon is the same as the property described in_________ Commitment No. ___________with an effective date of ____________and that all easements, covenants and restrictions referenced in said title commitment or apparent from a physical inspection of the site or otherwise known to me have been plotted hereon or otherwise noted as to their effect on the subject property.



4. Said described property is located within an area having a Zone Designation _____ by the Federal Emergency Management Agency (FEMA), on Flood Insurance Rate Map No._________, with a date of identification of __________, for Community No.________________, in ____________County, State of______________, which is the current Flood Insurance Rate Map for the community in which said premises is situated.



5. The Property has direct access to____________________, a dedicated public street or highway. OR [indirect access to ____________, a dedicated public street or highway, by way of the Access Easement recorded in Book _______ Page_______.]



6. The total number of striped parking spaces on the subject property is _____, including _____ designated handicap spaces.


www.smith-roberts.com

Smith-Roberts National Corporation

100 N. E. 5th Street

Oklahoma City, OK 73104

Ph 800-411-2010

Fx 405-840-9116

http://www.smith-roberts.com/


What is Zoning?

Zoning is the mechanism municipal jurisdictions use to control desired growth and development, while trying to eliminate or at least minimize problems of crowding and land use conflicts. Zoning tells property owners what and how they can and cannot build on their land. Decades of court cases have shown that cities and towns have both a responsibility and a constitutional right to protect the public welfare by placing limits on the uses of private property.


Retroactivity

Zoning Laws are constantly changing but are not enforced retroactively. A building in existence at the time a new zoning law is adopted is said to be “grand-fathered” or “legally nonconforming” and cannot be declared illegally nonconforming. But if the legally nonconforming structure is destroyed beyond the threshold set forth in the Code, the owner may be allowed to rebuild only in accordance with present zoning laws.


Zoning Conformance Status of the Site

Legal Conforming

Legal Nonconforming

Nonconforming


Conformance Status -Legal Conforming

The project meets all zoning district use, area, setback, height, density, and parking requirements according to the most recent zoning ordinance or land use requirements in your jurisdiction. The (legal) nonconforming Rebuildability clause will not apply because your project is legal and has 100% right to rebuild in the event of any percentage of casualty.


Conformance Status - Legal Nonconforming

The project was conforming at the time of construction but due to changes in the zoning ordinance, in the governing jurisdiction, in the zoning designation, or other changes, the project is no longer conforming to the current Code. Jurisdictions have different rules governing legal nonconforming projects. Some allow 100% rebuild in the event of destruction while others require Planning Commission approval to rebuild, regardless of the percentage of destruction. All are subject to the Nonconforming Rebuildability Clause of the Zoning Ordinance, as they have been granted certain legal protections for rebuild.


What Causes a Property to become “Legally Nonconforming”

Built Prior to the Enactment of any Zoning Code

Changes in the Zoning Code since Enactment

Annexation from one jurisdiction to another

Lawful Subdivision of the Property

Condemnation Proceedings (often affects building and parking setbacks)

Rezoning of the Property


Conformance Status - Nonconforming

The project does not conform to current zoning requirements, and did not conform to the requirements in place at the time of construction. In the event of destruction of any percentage or value, the project will required to be re-constructed according to the requirements of the current Zoning Ordinance. The Nonconforming Rebuildability Clause of the Zoning Ordinance will not apply to a nonconforming project because the site does not have a legal status.


What Will Cause My Property to Become “Nonconforming”

A Change of Use (retail to restaurant), done without Approvals, which Requires Additional ParkingIllegal Use (retail in residence)Re-striping of the Parking Lot which causes required Spaces to be LostRemoval of required Landscaping to Accommodate Additional Parking or StructuresConversion of Apartment, Hotel or Nursing Home Units that Exceed the Total Number Approved at the Time of Construction (common in Assisted Living Centers)A Structure accidentally constructed closer to the Property Line than what was originally ApprovedOther Construction Errors (more common than you might think)


Are there any Remedies if the Project is Nonconforming?

Usually not easy or inexpensive, but you can:

- Stripe more spaces

- Move the encroaching accessory building

- Apply for a Variance or Special Use Permit

- Draw up a Reciprocal Parking Agreement with the Adjoiner

- Purchase Land from the Adjoiner

- Apply for a Change in the Zoning District


Typical Lender Requirements to deal with Zoning “Issues”

3.0 Zoning Endorsement, provided by the Title Company

3.1 Zoning Endorsement, provided by the Title Company

Law & Ordinance Coverage, provided by private insurance carriers


What is a Zoning Endorsement?

3.0 Zoning Endorsement- This endorsement to the Loan or Owner’s Policy provides insurance of the applicable zoning classification and authorized use of the land. It is designed for issuance on unimproved property.


What is a Zoning Endorsement?

3.1 Zoning Endorsement - This endorsement to the Loan or Owner’s Policy is designed for issuance on improved property. Like the 3.0, this Endorsement insures (1) the zoning classification, and (2) authorized uses under that classification. In addition, this Endorsement insures against a final court order prohibiting the present structure, and requiring removal or alteration of the present structure, because of violation of the zoning ordinance as to (1) area, width or depth of the land as a building site, (2) floor space area of the structure, (3) setback of the structure, (4) height of the structure, or (5) number of parking spaces.

Important to note that some states do not issue Zoning Endorsements or are limited in scope, i.e., Texas, Florida, New York, New Mexico


Example 3.1 EndorsementALTA Zoning-Completed Structure Endorsement 3.1 POLICY NUMBER __________ ISSUED BY:

1. The Company insures the insured against loss or damage sustained by reason of any incorrectness in the assurance that, at Date of Policy:

(a) According to applicable zoning ordinances and amendments thereto, the land is classified Zone __________. (b) The following use or uses are allowed under that classification subject to compliance with any conditions, restrictions, or

requirements contained in the zoning ordinances and amendments thereto, including but not limited to the securing of necessary consents or authorizations as a prerequisite to the use or uses:

2. The Company further insures against loss or damage arising from a final decree of a court of competent jurisdiction (a) prohibiting the use of the land, with any structure presently located thereon, as specified in paragraph 1(b); or (b) requiring the removal or alteration of the structure on the basis that, at Date of Policy, the ordinances and amendments

thereto have been violated with respect to any of the following matters: (i) Area, width or depth of the land as a building site for the structure; (ii) Floor space area of the structure; (iii) Setback of the structure from the property lines of the land; or (iv) Height of the structure, or(v) Number of Parking Spaces. There shall be no liability under this endorsement based on the invalidity of the ordinances and amendments thereto until

after a final decree of a court of competent jurisdiction adjudicating the invalidity, the effect of which is to prohibit the use or uses.

Loss or damage as to the matters insured against by this endorsement shall not include loss or damage sustained or incurred by reason of the refusal of any person to purchase, lease or lend money on the estate or interest covered by this policy.

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

Signed under seal for the Company, but this endorsement is to be valid only when it bears an authorized countersignature.


Example 3.1 EndorsementALTA Zoning-Completed Structure Endorsement 3.1 POLICY NUMBER __________ ISSUED BY:

1. The Company insures the insured against loss or damage sustained by reason of any incorrectness in the assurance that, at Date of Policy:

(a) According to applicable zoning ordinances and amendments thereto, the land is classified Zone __________. (b) The following use or uses are allowed under that classification subject to compliance with any conditions, restrictions, or

requirements contained in the zoning ordinances and amendments thereto, including but not limited to the securing of necessary consents or authorizations as a prerequisite to the use or uses:

2. The Company further insures against loss or damage arising from a final decree of a court of competent jurisdiction (a) prohibiting the use of the land, with any structure presently located thereon, as specified in paragraph 1(b); or (b) requiring the removal or alteration of the structure on the basis that, at Date of Policy, the ordinances and amendments

thereto have been violated with respect to any of the following matters: (i) Area, width or depth of the land as a building site for the structure; (ii) Floor space area of the structure; (iii) Setback of the structure from the property lines of the land; (iv) Height of the structure, or(v) Parking There shall be no liability under this endorsement based on the invalidity of the ordinances and amendments thereto until after

a final decree of a court of competent jurisdiction adjudicating the invalidity, the effect of which is to prohibit the use or uses.

Loss or damage as to the matters insured against by this endorsement shall not include loss or damage sustained or incurred by reason of the refusal of any person to purchase, lease or lend money on the estate or interest covered by this policy.

This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof.

Signed under seal for the Company, but this endorsement is to be valid only when it bears an authorized countersignature.


Law and Ordinance Coverage

Three Separate Coverages:

Coverage A: Building Ordinance – Covers the value of the undamaged portion of the building that must be demolished should the casualty exceed the % threshold set by the Rebuildability Clause of the Code

Coverage B: Demolition Cost – Covers the cost to actually demolish the undamaged portion of the structure once it is declared a total loss

Coverage C: Increased Cost of Coverage – provides the additional cost sustained in building to new code requirements, i.e., windstorm in Florida or earthquake in California


The PZR Zoning Report

What the Zoning Report Provides

What Analysis the Report Provides

What Documents the Report Provides

What Client Information is Needed to Prepare a Report

What Survey Information is Needed to Prepare a Report


Provides the Conformance Analysis to allow the Title Company to Issue an Endorsement or

otherwise allow the Lender determine Risk

Analysis of Conformance with:UseSetbacksHeightDensityOpen Space/Lot CoverageLandscape BuffersParking


Documents or Verification Obtained in Conjunction with the Zoning Report

Zoning Verification Letter

Zoning & Building Violations Letter

Variances

Special and Conditional Use Permits

Site Plan Approvals

Applicable Zoning Code Pages

Certificates of Occupancy

(If Available in the Jurisdiction)


Client Information Neededto Prepare a Zoning Report

Specific street addresses

Specific “use” information

Tax Parcel ID #

Legal Description

As-Built Survey

Site Plan

Rent Roll / Unit Mix, with gross floor area

Old Zoning Letters, C. of O.’s and other available approval Documents

Date of Construction


Survey Requirements for Zoning Review

A current survey which reflects the following:

1. Total acreage (ALTA Optional Item #4)

2. Building improvements (Base ALTA)

3. Square footage of the building footprint (ALTA Optional Item #7b(1)

4. Height of the building/number of stories (ALTA Optional Item #7c)

5. Total number and location of parking spaces (ALTA Optional Item #9)


www.smith-roberts.com

Smith-Roberts National Corporation

100 N. E. 5th Street

Oklahoma City, OK 73104

Ph 800-411-2010

Fx 405-840-9116

http://www.smith-roberts.com/

Joint ALTA/ACSM & Zoning Due Diligence

Real Estate

Transcript of Joint ALTA/ACSM & Zoning Due Diligence