If you are in the middle of a commercial real estate transaction and your lender keeps bringing up an ALTA survey, you are not alone in wondering what it is and why it matters so much. It sounds technical, and in some ways it is. But the reason lenders ask for one is actually pretty simple once you understand what the survey covers and what it is designed to protect against.

What Is an ALTA Survey?

An ALTA survey is a type of land survey that meets a specific set of national standards written jointly by the American Land Title Association and the National Society of Professional Surveyors. Those standards are updated periodically, with the most recent version taking effect in 2021.

What makes an ALTA survey different from a standard boundary survey is the level of detail required. A regular boundary survey establishes where the property lines are. An ALTA survey does that and a lot more. It documents easements, rights of way, access points, utilities, improvements on the land, zoning classifications, and any other conditions that could affect how the property is used or what a buyer is actually getting.

The goal is to give everyone involved in a transaction, the buyer, the lender, and the title company, a complete and standardized picture of the property before money changes hands.

Why Lenders Require an ALTA Survey

Lenders are not asking for an ALTA survey to be difficult. They are asking for it because they are about to put a significant amount of money into a property, and they need to know exactly what that property consists of.

Think about it from the lender’s perspective. Before they agree to finance a commercial property, they need to know whether there are any easements crossing the land that could restrict how it is used. They need to know whether the buildings on the property are actually within the boundary lines. They need to know whether there are any encroachments from neighboring properties. They need to know whether the property has legal access to a public road.

A standard boundary survey does not answer all of those questions. An ALTA survey does. That is why it has become the standard requirement for commercial real estate transactions and why title insurance companies rely on it to issue policies with fewer exceptions.

What an ALTA Survey Actually Covers

The 2021 ALTA/NSPS standards set out a minimum list of items every ALTA survey must include. On top of that, there is an optional list called Table A that allows the client to request additional items depending on what the transaction requires.

The minimum items included in every ALTA survey cover things like:

• The boundary lines of the property
• The location of all buildings and improvements on the land
• Observed evidence of easements and rights of way
• Access to public roads
• Water features and bodies of water on or near the property
• Parking areas and their configuration
• The location of utilities observed during the survey

Table A optional items go further. They can include things like flood zone information, zoning classifications, building setback requirements, interior floor plans of buildings, and evidence of underground utilities. Which Table A items are requested depends on what the lender or title company needs for the specific transaction.

How an ALTA Survey Differs From What You Might Be Used To

If you have bought or sold residential property before, you may have had a basic boundary survey or a simple location drawing done. Those surveys serve a specific purpose and work fine for what they are designed to do.

An ALTA survey is a different level of work. The research goes deeper, the fieldwork is more detailed, and the final drawing follows a strict format that is consistent no matter which state the property is in. That consistency is part of the point. A lender financing a property in Talladega, Alabama should be able to read an ALTA survey the same way they would read one from anywhere else in the country.

That standardization comes at a cost. ALTA surveys take more time and more expertise to complete than a basic boundary survey, which is why they cost more. For commercial transactions where significant money is involved, that cost is considered a standard part of doing business.

Who Typically Orders an ALTA Survey

In most commercial transactions, the buyer orders the ALTA survey as part of their due diligence process. The lender may specify which Table A items they require, and the title company may have additional requests based on what they need to issue a clean title policy.

In some cases, a seller may have an existing ALTA survey that is recent enough to be used in a new transaction. Whether an older survey can be recertified for a new transaction depends on how much has changed on the property and whether the lender will accept it. That is a conversation to have with the surveyor and the title company early in the process.

ALTA Surveys in Talladega, Alabama

Commercial properties in Talladega and Talladega County are subject to the same national ALTA/NSPS standards as anywhere else in the country. The surveyor completing the work must be a licensed Professional Land Surveyor in Alabama.

One thing worth knowing about Talladega County specifically is that some commercial properties in the area sit on land with older deed histories and recorded easements that go back many decades. An ALTA survey is designed to surface those kinds of issues. If an easement was recorded 50 years ago and no one has thought about it since, an ALTA survey is likely to find it. That is exactly the kind of discovery that protects buyers and lenders from inheriting a problem they did not know existed.