How should encroachments be indicated on final title policies?

Encroachments should be indicated on final title policies as an exception because they represent a potential issue that could affect the title to the property. Title insurance is designed to protect against certain risks, including defects in the title, and encroachments can impact the ownership rights of the property. By listing encroachments as exceptions within the policy, the title insurer informs the buyer that there is a specific risk associated with the property that does not fall under the coverage of the policy. This allows the buyer to be fully aware of any existing encroachments and their implications, which may include disputes with neighboring property owners or complications in property use.

In contrast, indicating encroachments as a survey would not provide the necessary visibility for potential risk on the title policy itself; a survey may be useful for identifying property boundaries and physical locations but does not serve the same purpose as an exception in a title policy. A variance typically pertains to zoning changes or special permissions granted by a governing body, which is distinct from the concerns surrounding encroachments. Conditions imply requirements that must be met for the policy to be valid but do not adequately address the specific risk posed by encroachments, which necessitate clarity for all parties involved.