Investors and business leaders seeking to acquire commercial real estate may bypass a survey, especially if their lenders do not require one. A survey validates the boundaries of a parcel, which can help resolve disputes between neighbors or validate appropriate placement for improvements, which may need to be a certain distance from the line between parcels.
When seeking to acquire a property based on improvements, rather than raw acreage, a survey may seem like an unnecessary expense. However, surveys provide critical protection for commercial real estate buyers. They limit the likelihood of future title issues and restrictions on property use that could affect the return on an investment.
How will a survey help?
A commercial real estate survey helps validate the exact placement of a parcel’s boundaries. In some cases, outdated legal descriptions in deeds or inaccurate information provided by well-intentioned sellers can leave buyers with an incorrect idea about the size and placement of a parcel.
Especially when buyers intend to erect improvements on the property, including buildings or parking lots, boundary placement is critical. If there isn’t sufficient space for the planned improvement, using the parcel as intended might not be feasible.
Additionally, the surveyors can identify encroachments, such as a fence or other structure erected by a neighbor that crosses the boundary between the two parcels. Encroachment can affect the use of the property and its eventual resale value.
Investing in a survey is one of several key steps for protecting buyers acquiring commercial real estate. An attorney’s guidance can help buyers protect themselves with appropriate contingencies and the right services during commercial real estate transactions.