This is a question that I receive regularly from clients who are purchasing property. Most often clients are debating whether the information received from a survey is worth the cost and time to have a survey prepared. Surveys are not required to purchase real estate. However, if you are financing all or a portion of the purchase price, your lender will most likely require a survey. When I am reviewing title of a property for a client, an up to date survey of the property is one of the most important pieces of the puzzle. The survey provides an illustration of the easements, restrictions and plats that affect the property. Sometimes these documents will include precise descriptions of the location of the easements, encumbrances or building lines on the property. More often than not, these documents reference a metes and bounds description that begins and ends on adjacent property so it can be nearly impossible to truly understand where the items are located on the property that is being purchased. An accurate survey is by far the best way to determine boundary lines, the location of improvements and easements on the property and any encroachments or protrusions upon adjacent property. This information is critical in determining whether you can use the property for the intended purpose or if there are any additional issues that must be addressed.
A recent case from the Corpus Christi Court of Appeals, Chapa v. Arellano, is an example of what can happen when you purchase property without a survey. In 2017, Chapa purchased a parcel of land from the Arellanos in Hidalgo County, Texas, with the intention of building a home on the land. Chapa inspected the property and saw no visible impediment for the construction of a home. She did not hire a title company or have a survey of the property prepared. The Arellanos conveyed the property to Chapa by General Warranty Deed. The deed listed the “Right of Way easement in favor of Rio Grande Valley Gas Co, as shown by an instrument dated September 12, 1961, in Volume 1028, Page 12, Deed Records of Hidalgo County”, under the Exceptions to Conveyance and Warranty. The deed also stated the transaction was an “‘as is, where is’ transaction and reflects the agreement of the parties that there are no representations of express or implied warranties. [Chapa] has not relied on any information other than [her] inspection.” After Chapa purchased the land she began planning for the construction of a home.
Shortly thereafter, Rio Grande Valley Gas Company placed a sign on the property indicating that an easement existed and informed Chapa that a gas line runs across her property. She was subsequently notified that she could not build a home on the lot.
Chapa brought suit against the Arellanos for breach of contract, rescission, and actionable fraud. Both parties moved for summary judgment. Chapa argued that the sale was fraudulent because the property was not subject for any surface development and was, therefore, worthless to Chapa. The Arellanos argued that Chapa had disclaimed any reliance or oral representations by signing the deed, the easement of the gas company was properly disclosed in the deed, and the deed was drafted by a lawyer chosen by Chapa. Further, Mrs. Arellano stated that although she knew there was an easement for the gas company on the property, which was disclosed in the deed, she had no knowledge that the property was not suitable for residential use due to such easement. The trial court granted the Arellanos motion for summary judgment and dismissed the case. Chapa appealed the dismissal of her fraud and rescission claims. The Corpus Christi Court of Appeals ruled in favor of the Arellanos, affirming the trial court decision. The full opinion is available here.
The Chapa case provides an example of why it is so important to learn everything you can about property before you purchase it. Ideally, Chapa would have reviewed the gas company’s easement and confirmed the location and impact of the easement on a survey of the property. Instead she relied solely on her visual inspection of the property. Real estate has many different factors that must be analyzed and considered before it is purchased. Since surveys provide key information that is not available from other sources, I recommend reviewing an updated and accurate survey as part of your due diligence investigation of any property you consider purchasing.