Seller Obligation to Address Survey Matters Continues After the Expiration of the Due Diligence Period

We all agree that the benefits of obtaining a physical survey of property being purchased are well worth the expense in most instances.   Also, we all understand that due to the expense of the survey, the survey is one of the last “inspections” to be scheduled by a buyer or Realtor if they order one at all.   Because the survey is sometimes ordered later in the Due Diligence Period than other inspections, we occasionally receive anxious calls from buyers and Realtors who are concerned that the Due Diligence Period is expiring and the surveyor has not yet provided a copy of the survey.  

In fielding these calls, we point to the following NOTE under Paragraph 8.  Seller Obligations:

(NOTE: Buyer’s failure to terminate this Contract prior to the expiration of the Due Diligence Period as a result of any encumbrance or defect that is or would have been revealed by a title examination of the Property or a current and accurate survey shall not relieve Seller of any obligation under this subparagraph.)

This Note makes clear the seller’s obligation to provide title to the property free of title defects such as fence and driveway encroachments, easements or like matters, even after the buyer’s Due Diligence Period has expired.  If a survey provided after the expiration of the Due Diligence Period reveals an encroachment, the buyer is still entitled to request that the seller address that issue in a manner which makes the title marketable.  If the seller refuses to remedy the title defect, the buyer may terminate the contract and demand return of the earnest money deposit.

Of course, to stay on track for closing - especially under the new TRID deadlines - it remains the best practice to order the survey in advance of closing to allow for time for the seller to remedy any title defects the surveyor may identify.