What a Survey Exception on the Title Commitment Means

The title commitment has arrived and somewhere in Schedule B is a paragraph saying the policy will not cover anything a correct survey would show. Nobody has explained it, it sounds like the title company is refusing to insure your house, and the closing is in three weeks. It is neither as alarming nor as meaningless as it first appears.

This article covers what an exception actually is, why the survey one is on almost every commitment, when it is worth removing, what removing it costs and requires, and what a seller should do about it.

What an exception means

A title commitment sets out the terms on which a policy will be issued. Schedule B is the list of things the policy will not cover.

Some exceptions are specific to your property: a recorded easement, a mineral reservation, an unreleased mortgage. Others are standard and appear on nearly every commitment because the insurer has no way to know about them from the records alone.

An exception is not a defect. It is a statement about what the insurer is declining to guarantee, which is a different thing.

In Oklahoma this sits alongside the abstract system, where the compiled record of everything filed against the parcel is examined by an attorney who issues a written title opinion. Our article on the Oklahoma abstract of title covers that, and our article on what a title company does before closing covers the process around it.

Why the survey exception is there

The survey exception typically excludes cover for anything that an accurate survey and physical inspection of the property would disclose: encroachments, overlaps, boundary line disputes, shortages in area, and easements that are visible on the ground but not recorded.

The reason is simple. The title company searched the records. It did not go and measure your land. Everything on that list is a thing you find by standing on the property with instruments, not by reading a chain of title.

So the exception is on the commitment because nobody has surveyed the property, not because anybody has found a problem. On an ordinary residential sale in Oklahoma, where a new survey is not customary, it is simply the default.

When it is worth removing

Removing it means providing a current survey acceptable to the title company, which then issues the policy without that exception, sometimes described as extended coverage. The exception may be replaced by specific exceptions for whatever the survey actually reveals, which is the point: known items instead of a blanket unknown.

It is worth doing when:

• There is visible reason to wonder. A fence that does not line up with anything, a neighbour's shed close to the line, a driveway that appears to cross
• The lot is irregular, large, or the legal description is old and wordy, particularly on acreage where descriptions were written by reference to features that have since moved or gone
• Something has been built since the last survey, by you or next door
• The buyer's lender requires it, which happens on some transactions and is not negotiable when it does
• You already suspect a boundary issue, in which case our article on boundary disputes and encroachments covers what happens next

It is usually not worth doing on a straightforward rectangular lot in a platted subdivision, with nothing unusual on the ground and no lender requirement. That is most houses.

What it costs and how long it takes

A boundary survey by a licensed Oklahoma land surveyor is the deliverable. Cost varies with the size and shape of the parcel, how much of the record has to be reconstructed, and how overgrown the corners are. Get quotes rather than assuming, and specify that you want improvements shown, so the fence, shed and driveway appear on it relative to the line.

The thing that catches people is timing. Surveyors have backlogs, and a survey ordered in the last fortnight before closing frequently arrives after the closing date. If a survey is going to be needed, that decision belongs at the start of the transaction.

Who pays is a matter of contract and negotiation. There is no rule that makes it the seller's cost or the buyer's.

The other standard exceptions on the same page

The survey one gets the questions, but it is rarely alone on Schedule B, and it helps to know which of its neighbours are routine and which are about your property specifically.

Rights of parties in possession. An exception for anybody occupying the property whose rights are not in the records, which on a house with a tenant is a real question and on an owner-occupied house is a formality.

Unrecorded liens for labour or materials. Work recently done that could still ripen into a mechanic's lien. If you have had a roof or a bathroom done in the last few months, expect this to be raised and be ready to show that the contractor was paid. Our article on mechanic's liens in Oklahoma covers how those work.

Taxes and assessments not yet due or payable. Routine, because the bill exists in principle before it exists on paper.

Mineral reservations. Common in Oklahoma and frequently permanent. Our article on severed mineral rights covers what it means when the surface and what is underneath belong to different people.

The useful habit is to read down Schedule B once and put each item into one of two piles: standard language that appears on everybody's commitment, or a specific fact about your parcel. The second pile is the one to ask questions about.

What a seller should actually do

1. Read Schedule B properly, and ask the title company to explain any exception you do not understand. That call is free and it is their job
2. Separate the standard exceptions from the specific ones. A recorded easement against your parcel is a fact about your property. The survey exception usually is not
3. Look for anything you already know about and say so early. If you have always suspected the fence is in the wrong place, that is far better raised in week one
4. Find any survey you already have. One from your own purchase may be acceptable, or may at least tell everybody whether there is a question worth asking
5. Do not order a survey reflexively. On an ordinary lot with nothing unusual on the ground, you are paying to answer a question nobody asked
6. Do order one immediately if it will be needed, because the delay is the expensive part rather than the fee

Where we come in

A survey exception on its own is not a reason to do anything differently. It is on nearly every commitment in Oklahoma and most transactions close with it in place. If that is all you have, carry on with your sale.

Where a cash sale becomes relevant is when the survey comes back and shows something real: an encroachment, a shortage in area, a structure over a line. At that point you are into the boundary problem rather than the exception, and a financed buyer's lender may or may not accept it while a cash buyer can decide for themselves. Our page on selling a house with title problems covers how those are handled.

If your survey is clean, keep it. It is worth real money to the next buyer and it stops the same conversation happening to somebody else in five years.

The short version

• Schedule B of a title commitment lists what the policy will not cover. An exception is not a defect
• The survey exception excludes what an accurate survey and inspection would show: encroachments, overlaps, boundary disputes, shortages in area, visible unrecorded easements
• It is there because nobody measured the property, not because anybody found a problem
• Removing it means providing a current survey the title company accepts, and the blanket exception may be replaced by specific ones for what the survey found
• Worth removing where there is visible reason to wonder, the lot is irregular or large, something has been built, or the lender requires it
• Usually not worth it on a plain lot in a platted subdivision with no lender requirement
• Order it early if you need it. The delay costs more than the fee
• If you get a clean survey, keep it