Title Review and ALTA Surveys for Data Center Land

Data center campuses are large, expensive and long-lived. A title or boundary problem that would be a nuisance on a small commercial lot can stop a campus: an easement under a planned substation, a gap between two assembled parcels, an access road that turns out to be private, or an old reservation that lets someone else use the surface. Lenders, investors and the utility will all want clean answers, often before they commit.

Title and survey work are usually ordered during the diligence period after a purchase agreement or option is signed. On a large site they take time, especially with many parcels or old records, so they belong early in the due diligence checklist, not at the end.

A title commitment is the insurer’s offer to issue a policy once its requirements are met. The standard form used in most of the country has a few main parts. Labels differ slightly between form versions, and some states use their own forms.

The exceptions in Schedule B-II are the core of the review. Each one is a risk the buyer would take on. Standard exceptions, such as matters a survey would show or parties in possession, can often be removed or narrowed with a current survey and owner affidavits. Specific exceptions, such as a recorded pipeline easement or a mineral reservation, stay unless the underlying right is released or modified.

Objections and cure

Most purchase agreements give the buyer a window to object to title and survey matters, then give the seller a period to cure. Typical objections for data center land include unreleased mortgages, judgments, unplottable blanket easements, restrictive covenants that bar industrial use, encroachments and gaps in access. Severed minerals and easements are often the hardest items, as covered in mineral rights and easements.

An ALTA/NSPS Land Title Survey is a boundary survey performed to minimum standards jointly adopted by the American Land Title Association and the National Society of Professional Surveyors. The standards are updated periodically. They set out what the surveyor must research, measure and show, so title insurers and lenders can rely on the result across states.

• Boundary lines, monuments and the legal description, with any differences between record and measured dimensions.
• Every plottable easement and right listed in Schedule B-II, located on the drawing, with notes on items that cannot be plotted.
• Legal and physical access to public roads.
• Visible improvements, utilities and evidence of use, such as roads, fences, poles and pipeline markers.
• Encroachments onto or from neighboring land, and gaps or overlaps with adjoining parcels.
• The surveyor’s certification to the named parties, usually the buyer, lender and title insurer.

The surveyor works from the title commitment and the documents listed in it, so order title first and send the commitment and copies of the exception documents to the surveyor.

Table A is a list of optional items the client can add to the minimum standard. The numbering and exact wording change between editions of the standards, so order by description and confirm against the current version. For large data center sites, the items that usually earn their cost are:

• Monuments set or found at property corners.
• Flood zone classification based on the FEMA Flood Insurance Rate Map.
• Gross land area, so the acreage in the deal is measured rather than taken from tax records.
• Topography or contours, often at a coarser interval for screening and finer later for design.
• Zoning classification and setback requirements, where the client provides a zoning report or letter.
• Evidence of underground and overhead utilities based on markings and plans.
• Names of adjoining owners, useful for assembly and notice requirements.
• Evidence of recent earth moving, construction or dumping.
• Location of wetland delineation markers, where a delineation has been done.
• Off-site easements or rights that benefit the property, such as access or utility easements across neighbors.

Items aimed at existing buildings, such as building dimensions, heights and parking counts, matter less on raw land but matter on industrial reuse sites. A careful scope saves time on a 500-acre survey, where each extra item can add field work.

Many data center campuses combine several parcels from different owners. Each parcel has its own title history, and the combined site has to work as one. The approach described in our guide to parcel assembly depends on getting this right.

• One survey of the whole site, showing each parcel and the combined boundary.
• A check for gaps (gores) and overlaps between adjoining legal descriptions, which are common in older rural records.
• Contiguity confirmed on the survey and, where available, insured by endorsement.
• Consistent treatment of easements that cross parcel lines.
• Interior roads or rights-of-way that would split the site and may need to be vacated.

The buyer usually receives an owner’s policy, and any lender receives a loan policy. Endorsements extend coverage to specific risks. Availability and pricing vary by state, so ask the title company which apply.

• Access coverage confirming the land abuts and has access to a public road.
• Contiguity coverage for assembled parcels.
• Survey-related coverage tying the policy to the survey’s legal description.
• Zoning coverage, sometimes tied to a specific use.
• Coverage related to minerals and subsurface rights, where offered.
• Coverage for restrictive covenants and the effect of any violations.

When we assemble diligence on a site, we read the commitment and the survey together and map every exception that touches a likely building, substation or utility corridor. That list, more than the policy amount, tells you how clean the site really is.