During a real estate transaction, your mortgage and/or title company may need some form of assurance that the piece of property being purchased is just as it is stated in the sales contract (how it is situated on the property, are there any other buildings/fixtures on the property and how do they sit, etc.) Often times, a survey is not necessary. An improvement location certificate will usually be all that is needed.
What is an improvement location certificate?
“Improvement Location Certificates are used to locate the improvements on a parcel of property and determine if any apparent encroachments are present.” (reportlandsurvey.com)
ILC’s can usually provide the information needed during a real estate transaction for less cost than a full survey.
“Their purpose is to provide the location of the structures and improvements in relation to property boundaries as noted on the deed. It is important to note that the measurements and boundaries in ILCs are estimates and not exact numbers; language in ILCs clearly states that the numbers are estimates. When lenders have questions about the validity of the estimates included in ILCs or have concerns that encroachments may exists, they order full surveys.
In a nutshell, ILCs address the following:
- Encroachments: The certificate confirms the location of buildings and structures and notes any that cross boundary lines or easements.
- Legal description: ILCs confirm that the property’s legal description is accurate. This is important for title accuracy. The certificate also confirms that the property address is correct.
- Up-to-date survey: The certificate confirms that the survey is current and accurate. Lenders may ask for a copy of the survey to close a new construction home.
- Easements: The certificate confirms that all easements are documented and accurate.
- Fences are a hot button issue for mortgage underwriters. If a fence exists and it’s not on the property line, a survey may be needed.” (realestate.about.com)
Important Information about ILC’s vs. Surveys
Make sure that when you are involved in a real estate transaction where a “survey” is mentioned, to get clarification. ILC’s are usually only for the purpose of the mortgage/title company and not to be used by the property owner in any way.
ILC’s are not useful in determining property lines. A survey is needed for exact boundaries.
A full survey is recommended for anyone purchasing land with the intentions of building on the land.
If an ILC shows any issues or problems, a full survey may be needed.
For more information on this topic or any other real estate related topics, call us TODAY @ 720-593-2014. We are happy to help you in any way we can! During your real estate transaction, we will walk you through this and answer any questions that may arise.
Sources: reportlandsurvey.com, realestate.about.com