What does it mean to amend the survey exception as mentioned in paragraph 6.A.(8) of the TREC contract?

The standard exception on Schedule B of our title commitment and title policy reads as follows:

“Any discrepancies, conflicts, or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements.”

This exception is promulgated by the Texas Department of Insurance and can only be amended if the client requests the amendment and the premium for the amendment is paid. When amending the exception, it is changed from the above to only read “Shortages in Area”. This eliminates the exception for (1) Any discrepancies, (2) conflicts, (3) boundary lines, (4) or any encroachments, (5) protrusions or any overlapping of improvements.

Adds coverage for:
1. A neighbor claiming insured improvements are over the property line into the neighbor’s property.
2. A utility company requiring removal of improvements that are in their easement.
3. A homeowner’s association/city claiming improvements are located over a building setback line, set out in restrictions and demanding removal of those improvements.

However, if the discrepancy, conflict, protrusion, encroachment, etc. appears on the survey or is disclosed by a recorded document, that specific item will remain an exception on Schedule B under item 10.

On a residential policy, the cost for amending the survey exception is 5% of the owner’s title policy basic premium rate.