Title, survey, and easement problems that delay financing

A multifamily property can operate normally while its title, survey, or access documents create a financing problem. The lender needs security in the intended collateral and confidence that the property's essential rights survive the relevant risks. An owner needs to identify those issues early enough to obtain releases, agreements, analysis, or accepted insurance treatment before funding.

Review the physical property and the legal rights together. A paved driveway shows how residents enter today. The recorded documents show who can use it, maintain it, change it, or restrict it. Both forms of evidence matter to a financing decision.

Reconcile the collateral description first

Compare the deed, title commitment, survey, tax parcels, security instrument, and proposed loan model. Identify every parcel, improvement, parking area, access route, and offsite right essential to the property. Explain any difference among legal descriptions before assuming it is a harmless transcription issue.

Freddie Mac's current title chapter requires consistency among the title policy, survey, security instrument, and other property documents, including appurtenant easements. That program requirement makes a mismatched description a substantive diligence issue.^[1]

Ask the title company which requirements must be satisfied to issue the proposed lender coverage. Separate items that will be removed at closing from exceptions that remain. Obtain the actual underlying documents, not only their recording numbers. Freddie Mac requires analysis of documents creating title exceptions and specified treatment of adverse exceptions.^[1]

For an acquisition, identify which party can obtain each release or correction and put the dependency in the transaction timetable. For a refinance, check whether an older lien release was actually recorded. A prior settlement statement showing payment and a public record showing release answer different questions.

Commission a survey with the right scope

A survey provides physical and record information within a defined professional scope. Tell the surveyor the intended transaction and obtain agreement on optional work needed by the lender and title insurer. Do not assume a generic boundary survey includes all the financing's requested information.

The 2026 ALTA/NSPS standards became effective February 23, 2026 and superseded earlier versions. They require the request to identify the standard and selected TableA items, and address coordination for unusual interests or properties. The current standard should therefore be checked when commissioning new work.^[2]

Freddie Mac's survey provisions require then-current ALTA/NSPS standards, subject to stated waivers, and add program requirements including visible improvements, access, parking, and setbacks. Satisfying the base survey standard and satisfying every lender requirement are related but distinct tasks.^[1]

Give the surveyor current title evidence, prior surveys, easement documents, and relevant plans. Track the fieldwork and revision dates, certification, and final agreed scope. If an acquisition or refinance is delayed, confirm whether the lender needs an update rather than assume the first version remains acceptable indefinitely.

Read easements as operating agreements

For each important easement or shared arrangement, identify its location and the rights it supplies. Review who benefits, permitted uses, duration, maintenance duties, costs, transferability, amendment rights, termination, default remedies, and the treatment of mortgagees. An agreement that solved the original developer's problem may not give a later owner the same protection.

ALTA/NSPS's current map requirements address plottable easements and provide for notes when an easement cannot be located, is a blanket easement, limits access, or has other specified conditions. A survey note saying the location cannot be determined is an unresolved scope fact, not proof the right is harmless.^[2]

Freddie Mac's shared-access provisions call for legal analysis and address enduring access, breach remedies, expense allocation, recording, and other requirements. They distinguish an acceptable shared right from simple physical access across neighboring land.^[3]

Consider a hypothetical $88 million refinance of a 360-unit community. Its only driveway crosses a neighboring parcel under an agreement that can terminate if maintenance payments are missed. The property currently has full access, but the proposed financing needs an accepted solution to the contractual risk. Potential responses include amending the agreement, documenting an alternative access route, or obtaining another solution the lender and counsel accept. None is established merely by the owner's uninterrupted historical use.

Assume a negotiated amendment requires $240,000 paid to the neighbor and $35,000 of legal and survey work. The immediate modeled cost is $275,000. If the revised agreement also allocates $18,000 annual maintenance to the borrower, include that expense in underwriting. Funding the amendment does not eliminate the recurring obligation.

Distinguish insurance treatment from fixing the underlying right

An endorsement can insure specified risks within its coverage and exclusions. It does not necessarily relocate a building, create a road, amend an easement, or establish a right to expand. Determine whether the lender accepts the proposed coverage and whether the owner still faces an operating or development limitation.

Freddie Mac's survey chapter provides for analysis of material encroachments and violations and addresses circumstances where specified endorsements can mitigate risk. That is a conditional process, not a guarantee that every encroachment is insurable or acceptable.^[1]

A utility easement through a planned clubhouse offers a different illustration. The existing apartments may remain financeable, while the owner's renovation plan is infeasible without relocation or consent. Revise the work plan and budget accordingly. A lender's acceptance of present collateral does not approve construction that conflicts with a third party's rights.

Freddie Mac's legal chapter requires identification and analysis of transaction legal issues and relevant title matters. Escalate the actual document and proposed solution to the appropriate counsel rather than reducing the issue to a file marked “title cleared.”^[4]

Close the issue through evidence and acceptance

Maintain a schedule linking each title requirement and survey finding to its underlying document, reviewer, proposed treatment, funding need, and required acceptance. Identify which solutions require a neighbor, utility, municipality, title underwriter, or prior lender. Those counterparties may have different incentives and response times.

Update the title commitment and survey as necessary when a release, amendment, or new instrument changes the evidence. Confirm that the final loan documents describe the accepted collateral and rights. An agreed draft amendment is not the same as executed and recorded rights, and a promised endorsement is not an issued policy provision.

Freddie Mac's legal guidance also requires analysis of whether origination or assignment calls for notice to third parties under property agreements. Notice rights can matter even when the agreement is unrecorded; the applicable contract must be reviewed.^[4]

Preserve the final survey, policy, endorsements, underlying agreements, recorded corrections, and approval records. The useful financing outcome is a coherent picture of what the borrower owns, which rights support its operations, and how remaining risks are treated. That picture also makes later sales, refinancings, and renovations easier to assess.