Risk Management Articles

"All you have to do..." Lawyer and Surveyor - What a Team!
By Gunther Greulich, PLS, PE

"I hereby certify" is an ominous introduction to many a surveyor's death wish. Before committing millions of dollars to a commercial building project, buyers and sellers, a.k.a. grantees and grantors, lenders, banks, title insurers and their army of well-paid attorneys, love to pass the proverbial buck to their eager, and often gullible, land surveyor.

No matter how complex the legal and physical at-tributes of a parcel of land may be, attorneys manage to make it look simple. Despite rigid requirements of an ALTA/ACSM title insurance survey, the lawyer's introduction of legalese into surveyor's reports and certifications has duped surveyors into believing that all they have to do is put their name and registration number on a preprinted boiler plate.

Lawyers probably have good reason to make it look simple: it speeds up the process. Borrower's lawyers need the money in a hurry. Lender's lawyers want to have their money make more money quickly and safely. Title insurance lawyers want to keep their money-risk free. All of them would like to save money by minimizing the survey effort, and, yet, all the lawyers want to feel safe and comfortable by putting the burden of property boundaries, of easements, of rights-of-way, of encroachments, of takings, of zoning is-sues, and even of utility services on the unsuspecting surveyor. A typical scenario goes like this:

Knowing full well that the closing date or the due diligence is only five weeks away, lawyers first try to save a little money on the surveyor's fee by asking for a written proposal. When the surveyor's proposal arrives a week later, the client's attorney has taken off for a well-deserved one-week vacation in Bermuda. On his return and fully rested, he finds the proposal on his desk, unopened. Now he is in a panic ... only 15 business days left to the closing? But, not to worry. He knows that the surveyor has done a similar survey next door, just a couple of years ago. The estimate "is a little steep," says the lawyer, who knows almost as much about surveying as the surveyor knows about the law. The lender's lawyers claims he has never paid that much before for "a survey". With some hesitation, the "pricey" proposal is accepted. After all, the loan is for $42 million and "all you have to do ...." and please hurry... only 14 business days left to the closing. We don't know yet to whom the survey should be certified, but go ahead and do the survey. Don't worry much about research; the title examiner's report is in the works and we'll send you a copy shortly! Fax makes everything so efficient these days. Thank God for HI-TEC! "All you have to do ..." And, by the way, the (big) client in New York wants you to sign a contract for your services where they spell out some of the details. As soon as I get a copy, I'll fax it to you. But go ahead ... only 13 business days left to the closing and all you have to do ..."

When the 34-page draft contract (34 pages, no kid-ding?) arrives three days later, it also contains the lender's mandated version of a surveyor's certification. It's a boiler plate of Orwellian proportions ... double speak and trick questions all the way, loaded with "all," - "any" "none" and "other."

Called, modestly, the "Survey Services Agreement", the 34-page contract comes from the lender's attorney on the West Coast. They must be doing things a little differently over there, maybe? To make matters worse, all the surveyor's work must comply with Exhibit C, which happens to be missing from the package. Oh, well! "All you have to do ..." and only 10 business days left to closing.

After careful study of the contract, 18 exceptions or modifications are duly noted and initialed by the surveyor, in duplicate. Back to the attorney for final acceptance and signature by the client. Scope and fee fixed and cannot be exceeded without "the Buyer's prior written consent." While the "Buyer" is mulling over the 18 exceptions initialed by the surveyor, his attorney has another thought. It would really be helpful, and now it seems, even necessary, if the surveyor included a zoning certification in his report. "All you have to do ..."

Boston is an old city and its thick zoning code contains over 256 pages, plus 344 detailed amendments and hundreds of cross-references. To sort it all out will add to the "not-to-exceed fee." Could we get the Buyer's written consent, please? There isn't enough time for that, says the exasperated attorney. He, too, is under pressure! Just go ahead and hurry. "All you have to do..." Only eight business days left to closing... and, don't worry, you'll get paid. The surveyor crosses his fingers, knocks on wood, and frantically proceeds with his research, field survey, and office work. No contract yet. No title examiner's report yet. No names to whom to certify yet... only seven business days left to closing.

When, two days later, the title insurance commitment letter arrives, Schedule B lists 14 exceptions, eight of which are relevant easements, takings and street discontinuances, neatly referenced by book and page of the County Registry of Deeds, but no copy to review. They all must be shown on the plan. Back to more research; only five days left to closing.

The missing Exhibit C finally arrives. On reviewing the Orwellian boiler plate of the "Buyer's" standard surveyor's certification, the surveyor finds that he is to put his hard-earned reputation and professional registration on the line for a one-page document that has been cleverly crafted by a legal wordsmith of the highest order. "All you have to do..." On close examination, the one-page document reveals that it contains 34 lines and 299 words to encompass 44 certifications - all in one sentence! It is a classic surveyor's suicide note! Just sign below. Forty-two million dollars! To protect himself, the surveyor carefully dissects the all-encompassing certification into digestible and comprehensible parts, relevant to the facts of the survey. Invariably, he has to insert the words "to the best of my professional knowledge, information and belief" after the preprinted "I hereby certify".

"Oh, we almost forgot." The Boston lawyer got a call from the New York lawyer who spoke to the West Coast lawyer who thought that they really should get an advance draft Legal Description from the surveyor - not mentioned in the 34-page contract. "All you have to do ..." Three days before the closing, the attorney wants to see a first draft of the surveyor's certificate just in case. Lo and behold, the "Buyer" does not like "To the best of my professional knowledge..." He considers them weasel words - an attempt to escape responsibility for the survey. They never had this problem before with other surveyors! They must be doing things differently on the West Coast! Only two days left to the closing.

The hassle continues. The lawyer is desperate. The $42 million load is in jeopardy! He wants to do what his client is asking. The surveyor is adamant. He doesn't want to lose a future client and wants to maintain good will, but he also wants to stay in business. After all, his professional liability insurance policy clearly states under the heading "Exclusions" that the insurance company "will not pay under this policy for claims or claim expenses arising out of express warrantees or guarantees...

Off the record, the Boston lawyer admits, that he, too, cautions his architect clients not to issue certifications that amount to warrantees. But he is helpless here. He is "under the gun!" His client insists. It's the West Coast again! They probably blame the East Coast when they deal with West Coast surveyors. Who knows? The American Congress on Surveying and Mapping has published a little booklet, entitled The Liability Environment (Foster 1989), which strongly advises that "Certifications should only be furnished by surveyors when they ... do not create guarantees or warrantees...." The book quotes Black's Law Dictionary specifying that a certification is "the formal assertion in writing of some fact" and a certification in this context must not involve a statement of opinion. All to no avail. The lender turns a deaf ear. His $42 million must be protected no matter what. Yet, they finally compromise. Out of 17 dissected and itemized Surveyor's Certifications, eight are qualified by the words "to the best of my professional knowledge, in-formation and belief." The Surveyor's Certificate is amended with an addendum reporting 18 specific encroachments and other relevant observations by the surveyor. The one-page boiler plate has turned into five pages of reliable information and common sense. Against all odds, and after a total of 43 telephone calls and fax messages, the ALTA/ACSM title insurance survey and surveyor's report are completed, duly signed, sealed, certified and delivered on time. Great team work! Forty-two million dollars can now change hands, safe and sound. There is just one more request, though; please, deliver three identical copies of the original certificates, each with an original seal and signature of the land surveyor. Two days after the closing, an executed and 18-times counter-initiated "Survey Services Agreement" arrives at the surveyor's office. No mention of the additional fee for the rendered zoning opinion and certification.

Don't worry! You'll get paid.

What a team!

Gunther Greulich, PLS, PE President of Gunther Engineering, Inc., 803 Summer St., Boston, MS 02127. He is a Fellow, Life Member, and former president of ACSM (1991-92).

Reprinted from The ACSM Journal (American Congress on Surveying and Mapping)

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