What is an ALTA Survey & Why is it Required for Financing?
An ALTA survey is a type of survey commonly used in commercial real estate transactions in the United States. ALTA stands for American Land Title Association, which is a trade association for the title insurance industry. An ALTA survey is a detailed land survey that provides comprehensive information about a property, including its boundaries, easements, rights-of-way, encroachments, and other important features.
Commercial mortgage lenders often require an ALTA survey before they will finance a property because it helps them better understand the property they are financing and identify any potential issues or risks associated with it. For example, an ALTA survey may reveal that a neighboring property has an easement that allows them to use a portion of the subject property, which could affect the property's value or future use. Alternatively, an ALTA survey may reveal that a portion of the property is located in a flood zone, which could affect the lender's decision to provide financing or require additional insurance.
Overall, an ALTA survey provides important information that helps lenders make informed decisions about the properties they are financing, and can help protect both the lender and the borrower from potential legal or financial issues that could arise in the future.
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