Sep 28, 2022

The Importance of a Survey When Purchasing Commercial Real Estate

By Robert F. McAnanly, Esq.

When acquiring commercial real estate, every buyer should seriously consider retaining a licensed surveyor to prepare a survey of the real estate being acquired. A surveyor will conduct a site visit to determine the boundaries and other physical characteristics of the real estate. The surveyor will collect data, including the location and type of any building, driveway, easement, and minimum setback requirement. That data will then be depicted by the surveyor on a signed and sealed drawing, known as a survey.

Many people view a survey as an unnecessary expense. Often, they will not obtain a survey unless their lender requires one. The lender may not require a survey if it is able to obtain what is called a “no survey survey endorsement” to its loan policy of title insurance. While that endorsement may adequately protect the lender, its coverage does not normally extend to the new owner of the real estate.

“Big box” retailers will usually obtain an ALTA/ASCM survey which depicts the real estate to be acquired, in minute detail. That type of survey can be very costly and time consuming to prepare. Most buyers of commercial real estate will not need such a survey. All buyers should, however, require that a survey include the following minimum components:

  1. A complete perimeter “metes and bounds” description, together with a reference to the “filed map” description (a filed map is a map, recorded by an earlier developer, which remains of record in the county recorder’s office), if any.

  2. Depiction of all exceptions noted in buyer’s title commitment, to the extent that they can be plotted. These would include items such as access easements, utility easements, conservation easements and building set back requirements.

  3. The exact location and dimensions of all buildings, fences, driveways, and other improvements located on the real estate to be acquired. The survey should also depict any such improvements on neighboring property, if located within five (5) feet of the common property line.

Failure to procure an accurate survey and to ensure that the title agent “reads” the survey into the owner’s title policy (effectively removing the standard survey exception) can expose the buyer to unforeseen problems. Certain issues that would be identified by an adequate survey include the following:

  1. Encroachments. A building or other structure may extend from your property onto another property, or from that other property onto your property.

  2. Access. The survey may reveal that access is only across property of another, alerting you to the need for an access easement.

  3. Conservation Easement or Restriction. Conservation easements and other third-party restrictions may prevent you from developing all or a portion of the property that you are purchasing. To better understand those restrictions, you will want to review a depiction of the easement on a survey.

Unless you obtain a survey prior to acquisition of commercial real estate, it can be difficult to understand the nature and scope of these and other potentially negative “clouds” on title.

The above situations represent just a small sampling of the possible adverse issues that may exist unnoticed, in the absence of an accurate survey. If you would like more information on this topic, please feel free to call the undersigned or one of the many other experienced attorneys in our Corporate, Real Estate and Banking departments.

For more information, contact Robert F. McAnanly at or at (973) 540-7312.