What is a Survey Certificate?
One thing that you may have no choice but to obtain before purchasing your new home is a property survey. Although your lender may not require a survey certificate, there are other important reasons—financial and otherwise—to obtain one. Read on to learn more about survey certificates and why it is an important step in the home-buying process.
What is a Survey Certificate?
Not to be confused with an appraisal, a survey certificate shows not only the written boundaries and legal description of the property, but also an actual drawing! Survey certificates (done by a qualified and licensed surveyor) are the only way to determine the lot boundaries as well as any ‘improvements’ that have been made to the property over time such as any additions or new buildings.
Surveyors will physically go to the property to get the information they need to create the certificate. They will take all the measurements, sketch the property, land, legal boundaries and all the different components of the property. They also make notes of right-of-ways, zoning and other by-laws. This will be turned into a map of sorts, or a ‘plan of survey’. The surveyor will guarantee the accuracy of all the gathered information.
You may be required to get a survey certificate by your mortgage lender. Most lenders do require a property survey to be completed to make sure that the property is actually worth the same amount that will be provided in the loan. An up to date survey (most lenders require a new survey be made) also lets the lender know the exact location of the home, any other structures on the property, and that there are no present or potential problems with the property.
Why Would a Buyer Need a Survey Certificate?
While the fact that your lender requires a survey be done as a part of their mortgage requirements is reason enough to get one, there are a number of good reasons why a survey certificate is a wise investment.
As well as ensuring that your lender is satisfied that the property is as it appears, it is a pretty important thing for you—the buyer—to know, too! It is relatively common, especially in older properties, for there to be a small encroachment on the neighbour’s property or vice versa. Even more common is that the current owner of the property may have unwittingly been treating property as ‘private’ when it actually belongs to the municipality or is park land.
These encroachments could be as small as a few centimeters but could result in very expensive consequences down the line. For example, a deck could have been seen as ‘your property’ when you purchased your home, but if it was built just a foot into municipal land you may be required to move it or tear the whole thing down and rebuild it within your own property lines. It may not seem like a big deal, but doing due diligence when it comes to knowing your property’s boundaries could save you from a very costly mistake in the future, like building an addition, fence or driveway on land that doesn’t belong to you.
While the cost of a survey does vary, it should be factored in to the total amount you will pay on your property as it is a small price to pay for the peace of mind that your property is indeed, your property!
In spite of the importance of a survey certificate, it is now quite common for lenders to request title insurance rather than a survey certificate. Title insurance is less expensive, while still satisfying the requirements of a lender and a buyer and insures other risks as well, such as work done without a building permit.