On your new contract, you’ll see an option that says something like the following:
The standard printed exception as to discrepancies, conflicts, shortages in area or boundary lines, encroachments or protrusions, or overlapping improvements:
- will not be amended or deleted from the title policy;
- will be amended to read, “shortages in area” at the expense of [the buyer]
What does this mean?
This is the “shortages in area” exception – also known as the survey amendment – and it can be a helpful addition to your owner’s title policy. An exception in the policy limits or reduces coverage. This amendment greatly reduces the terms of the “shortages in area” exception, resulting in broader, more inclusive coverage.
How much does it cost?
As of May 2019:
- Residential Owner’s Policy: 5% of the premium charged for issuance of that policy based on the purchase price of the land
- Non-Residential Owner’s Policy: 15%
What if I choose not to amend/delete the endorsement coverage?
Without the survey amendment, the policy won’t insure against loss or damage described on a survey of the property (and the title company won’t pay costs, attorney’s fees or expenses) that arises as a result of the following:
- Any discrepancy in the location of the boundary of the land with reference to highways, streets, or any other type of monument.
- Any gaps or overlaps affecting the land.
- Any boundary line disputes affecting the land.
- Any encroachments of the improvements (above or below the ground) on the insured land onto any easement on the land or onto adjoining land.
- Any encroachments of the improvements (above or below the ground) located on adjoining land onto the insured land.
Adding the amendment provides coverage against most survey matters upon payment of the promulgated premium and the delivery of a survey to the title company that meets its underwriting requirements.
At Championship Title, we know all the ins and outs of the “shortages in area” exception, as well as all other aspects of the owner’s policy. We are ready to complete your closing no matter where in the world you are. Set up an online closing today.
Note: A survey can only be performed by a Texas Registered Professional Land Surveyor. The title company cannot perform or complete a survey of the property.