'Updating' an ALTA survey

[jcoffey]

My client came to me and asked me to 'update' my ALTA survey from about a year ago, and while I'm at it add 2 more parties to my certification - a new lender and new insurer on a refinanced portion of ownership. Now I can handle the part about 'updating' the information and bring the data on the ALTA current, but I wanted to get some of your thoughts on the 2 additional parties.

My first reaction is to require a fee for each of my additional exposures to liability by the 2 new parties. But if so, what should that fee be? As a percentage of original cost of the ALTA? Or of value of properties? Complexity of the information in the ALTA?

[Gromatici]

Let's say that 5 years from know there is a blunder discovered and they sue you:

I'd charge an amount that provides a nice buffer for an attorney's retainer, plus the time it takes to do a site visit, un-archive the DWG's and maybe spend a few hours combing over it to make sure everything was done correctly originally.

You should be reasonable, but you should also get compensated for your liability for "updating" it and added two more people who could sue you.

What you don't want to have happen is spend your valuable time updated old topo's, ALTA's and other mapping for free.

[Anthony Maffia]

The labor involved may be minimal, but the liability isn't. An ALTA is really a title insurance product, with you being the insurer, and title companies don't give discounts just because they've reviewed the property before.

Sell the update for what the market, er client, can bear.

[land butcher]

TOO often we surveyors base our fees on time and not liability, wrong way to do business.
RE agents, title cos, etc all base their fees as a percent of the value of the property.

[E_Page]

Are you adding parties certified to or replacing parties named in the certification? If you are replacing names, the exposure on this new survey should be the same as it was on the previous one, right? If you are adding then you are broadening your exposure.

Either way, you are renewing/extending your exposure to the liability by an additional year. That exposure should figure somewhat higher than the labor involved when determining the value of the update.

I've heard others toss around numbers like $500 per additional name, but it comes down to what you feel comfortable with and what the value of the property and project is.

[Paul Goebel]

Why not treat ALTA/ACSM updates like a new project – but with a very competitive fee because of unique knowledge that you have that others do not. You are at a great advantage over other firms who may be asked to start from scratch.

Trying to determine the fee for additional names on the certification is an educated guess at best, and you will have a difficult time justifying the fee. When faced with this situation, I would rather emphasize the competitive fee for the NEW survey and certifications when compared with other firms.

[jcoffey]

Thanks guys, for your thoughtful responses. I appreciate you taking the time.

These would be additional parties, because there is another loan being taken on a portion of the ownership. I believe I'll come up with the field time spent (costs) to verify the updated condition of the property, plus some fee for the 2 additional parties that seems fair for us and for them.

[land butcher]

Remember - their option is to have a new ALTA done at what cost.

Have to consider repeat client service too.

[PLS7393]

I'm surprised no one has mentioned the time it will take to review a new Preliminary Title Report. Not knowing the site, or previous survey, I have encountered significantly different reports. I hope you request a new report before your proposal, as that will give you additional information.

[land butcher]

I'm surprised no one has mentioned the time it will take to review a new Preliminary Title Report. Not knowing the site, or previous survey, I have encountered significantly different reports. I hope you request a new report before your proposal, as that will give you additional information.

Good point

[jcoffey]

Yes, thank you Keith. I have requested a new PR.

[rpost]

I update ALTA Surveys all the time. I do it for a substantially reduced fee but do require enough compensation to walk the site, do additional records research to look for new surveys in the area, review the PTR, etc. I also include a buffer in case I have to tie out a few monuments as a result of the additional research.

I do not normally ask for additional money if the client requests an additional insured be added. My finished product doesn't change because I am adding a few names. Additionally, I never price something "just in case" someone finds a blunder. I consider it a personal responsibility to ensure my finished product is free of such things. If a blunder is found that puts me in a bad spot, my client certainly should not be paying me in advance to defend myself.

[E_Page]

I do not normally ask for additional money if the client requests an additional insured be added. My finished product doesn't change because I am adding a few names.

That's because you are of the mindset that you are selling a product rather than a professional service. You are thinking in terms of production costs, not in terms of the value of your knowledge, the value of the project, and the exposure to liability (doesn't necessarily have to be due to your mistake, or anything within your control to get sued).

Even though many will argue with you to lower your price on the basis of your production costs, they understand what the purpose of the update is: to transfer liability to you. That's the purpose of the additional insured parties, so that those parties do not have to go through other entities to get to you should they decide the deal has gone sideways and they want to recoup investment from any and all parties asscoiated with the project. If you provide a clear path, you will be named. Even if you have absolutely no responsibility or connection to the actual issue, it will cost money just to have your attorney make the motion to have you removed from the suit. That is added exposure.

If there is an issue due to a mistake you make in the survey, any party who might reasonably rely on your survey and who has suffered damage by that reliance will be able to get to you anyway.

If the project is one of such value that the investors are likely to make several tens of millions, but the effort for you to check for and review new recorded docs affecting the survey, perform a field check, update the certificate, print and send it out only comes to $1200, will you only charge $1200? What if to have another surveyor perform a new survey would cost your client $30000?

If you were unable or unwilling to provide the update, your client would have to pay for a new survey. When you consider that, is the update still worth less than 5% of what a new survey is worth?

[rpost]

That's because you are of the mindset that you are selling a product rather than a professional service.

Incorrect Evan I am selling a professional service. The service is to create a finished product, an ALTA Survey.

In this economy it's all about service. This has nothing to do with the "professional" word at all. By giving the client a break (I didn't say free) and not needlessly extracting money from him, the repeat business may more than make up for it, thus covering the dreaded liability issue. If I take advantage of the client and lose his business I won’t be able to offer professional services to anyone, because I'll be broke. Besides maybe I'm just a nice guy. I like to think my clients appreciate that about me.

[E_Page]

The service is not creating a map. The service is accepting a transfer of risk from the lender and the title company, and then limiting that risk through your expertise as a licensed surveyor by performing adequate investigation and analysis. You prepare the map to convey the findings of your investigation and any opinions that you form as a result of your analysis.

Charging an appropriate fee for your expertise (not just your measuring and drafting efforts) and for the risk you have contracted to accept is not needlessly extracting money from your client.

I don't see how repeat business covers the "dreaded" (dreaded? really?) liability issue if during the initial contract and again under any subsequent contracts you fail to appropriately charge for the risk you are accepting.

Going back to the hypothetical I offered, your client has property he plans to develop with a projected ROI of $30,000,000. You did the initial ALTA for whatever you did it for. It is now getting closer to the construction phase and the client is taking out a 2nd loan against the property to help fund the development, and so needs an update. Just for comparison sake, in addition to contacting you for the update price, your client's attorney also contacts me and 2 other surveyors.

I give the attorney an estimate of $30,000. One of the other surveyors is close to my estimate and the other is about half of it. But you give an update price of $1200 because your pretty certain nothing has changed in the physical conditions and don't expect much in the way of additional items on the PTR. $1200 covers a couple hours to walk the site, some time to review the PTR and supporting documentation of any new items, the drafting, and incidentals (printing, mileage, etc.).

Of course, since my estimate is 25 times your price, and you can have the update to them by next Monday vs. 3 weeks for mine, they go with you. They are also aware that the adjacent property is being purchased by a rival developer and they're anxious to stay ahead of that project. You are not aware of the pending project on the adjacent property.

What you are also unaware of is that a fence you showed as encroahing by 4' on that side of the property actually follows the line called in the description of the adjoining property. Since it wasn't in your budget to investigate the chain of title of the adjacent properties, you were not aware that the adjacent property had senior title and that the fence follows a line from a survey of this property performed in 1948. The original deed description of that property made calls for lines and points of the 1948 survey, but some where along the line, a paralegal transcribed the description to a new deed, and to save typing, only transcribed the bearings and distances and left out all of that extra extraneous junk that surveyors like to put in to descriptions. So the most recent deeds of the adjoining property don't reflect the calls to the 1948 survey although all of the dimensions are the same.

You relied on the documents provided by the title company because that's what's stated in the ALTA standards. The title company didn't find the RS of the adjoining property because they are not responsible to do so. And they also only provided a copy of the latest deed for that property because that's all they were responsible for. Compounding the problem was the fact that the 1948 survey was mis-indexed. Although it was in the county records, no later surveys referenced it and the only reference was in the original deed of the neighboring, senior parcel. Unless you pulled that deed, you were not likely to find the 1948 map.

But the surveyor for the adjoining property, knowing the value of the property and of the project going on it, and also knowing that title companies often miss important documentation, charged to do this additional research. Knowing that the info will be important to explain and resolve conflicts with adjoining parcel descriptions, he wisely decided to trace each parcel back to its original conveyance.

The result is that your client's adjoiner ended up losing a boundary dispute for that 4' strip based upon your survey. The legal expenses alone were close to $250,000 before he decided to settle and have his engineer redesign to accommodate the difference in boundary location. Engineering costs for redesign cost him $50,000, and the delay to his project was costing him about $3000/day in interest.


Getting back to what your service is. You think it is creating a map. Your client's attorney knows that it isaccepting and limiting risk through professional expertise and diligence. The attorney understands that the higher the value of the project, the more diligent a professional should be. More diligence costs $ and translates to higher fees.

The attorney for the neighboring developer also knows that the service rendered by the surveyor is also in accepting risk. The surveyor for the adjoining property also understands that the service he provided was accepting and eliminating risk for the client and that the map is just a tool to demonstrate how that risk was identified and eliminated.

In hindsight, having considered what was paid out because of reliance on a $1200 update, how much would a more carefully performed survey have been worth to the client. Considering he would have saved several hundred thousand dollars had his surveyor found in the first place what the adjoiner's surveyor found, $30,000 would have been a bargain.


Creating "a finished product, an ALTA survey" is not a professional service, it's a drafting service. Knowing how to identify and account for the risk that is within the perview of a surveyor to identify, doing so and knowing the value of that assumption and elimination of risk relative to your client's intent for the property is the service. The map is only a means of showing what you identified as a result of your service.

"The service is to create a FINISHED PRODUCT, an ALTA survey."

Like I said... "That's because you are of the mindset... "

[dmi]

sheesh wadda i got to do survey the entire world?

nice one MR Page.

[rpost]

Evan,

Thank you for the response and wisdom. Apparently, you did not pick up on the sarcasm of my post. By the way, if I ever do an ALTA without comparing the adjoining deeds or make boundary decisions based upon my budget I would gladly hand over my license. I have way too much fun helping surveyors remember to file Record of Surveys and do proper boundaries on their ALTA's to make shoddy boundary decisions on my maps.

[subman]

I think we need a "special" font to identify when sarcasm is the intent...

[E_Page]

I think we need a "special" font to identify when sarcasm is the intent...

Yep. I missed it.

[Stephen Johnson]

I think we need a "special" font to identify when sarcasm is the intent...

Wendell Harness over at SurveyorConnect created a "Sarcasm Font".