Survey Inspection Sketches (aka Mortgage Loan Inspection (MLI), or Mortgage Inspection Sketch (MIS), or Class D Survey)
by Thomas B. McCowan, Esq.

This inspection of property by a surveyor is most frequently called an MLI (Mortgage Loan Inspection) or MIS (Mortgage Inspection Sketch), because it is sometimes required by a bank to obtain a mortgage loan.  However, an MLI (our preferred shorthand) is beneficial in ways beyond qualifying for a mortgage, and we generally recommend buyers of homes or other buildings in Maine seriously consider ordering one when purchasing.

If you are working with a Lender, an MLI may be required by either the Lender or the title attorney.  If you are purchasing a property with cash funds, we recommend you have one performed even if not required.

What It Is:

An inspection by a surveyor based upon the Town tax maps, the current deed to the property, flood maps, subdivision plans (if applicable), and any other knowledge the surveyor happens to have about the parcel.  The surveyor then visits the site and prepares a sketch of the property based upon this cumulative information.

What It Is NOT:

An MLI is NOT a full boundary survey.  The surveyor does not inspect the title history to the parcel.  The surveyor does not inspect the deeds and title histories of the neighboring parcels of land and adjacent roads and streets.  An MLI is not performed on vacant land, since its primary focus is to check locations of buildings.

What You Get:

The result is a sketch of the property with notes about compliance with setback requirements, subdivision covenants, and flood map zoning.  The sketch depicts the physical location of buildings, driveways, utility lines, roads, and any encroachments by fences, walls, and the like.

Here are examples of two MLIs on different properties (with identifying data removed):

Why It's Important:

1) An MLI can detect many problems with property that could cause you to reconsider purchasing the property, demand a cure of certain problems, or renegotiate the purchase price.  Some examples of problems we have seen discovered by an MLI are:

Lack of access to a road.

Driveway encroaches on neighbor's land.

Neighbor's driveway encroaches on subject parcel.

Building violates setback requirements or zoning laws.

Fences or walls crossing over property lines.

Landscaping or other indicators suggest that the neighbor thinks they own part of this parcel, or that the present sellers think they own more than they really do.

The property description is defective.

Principal building or other barns or sheds are actually on neighbor's land.

Well is on neighbor's land, or neighbor's well is on this land.

Large disparities in land area between what buyers think they are buying and what seller actually owns.

Pins set, blazings, or other indications that the property boundaries written in the deed don't match up with what is on the face of the earth, or that a neighbor disputes the boundaries.

Presence of discontinued roads, streets, or rangeways affecting title to the property.

2)  An MLI is a prerequisite to obtain an Enhanced owner's title insurance policy.  Enhanced policies insure against many of the defects that can be detected by an MLI, including defects that arise in the future (such as encroachments). 

There is one substitute for an MLI - a Survey Affidavit, in which the sellers are questioned at closing about the title to the property.  This may not be as reliable as an MLI, however, because the sellers are often unaware of the kinds of defects listed above.  A survey affidavit costs $50, which is included in the title insurance fee.

If you are buying a property from a foreclosing bank or an Estate, we strongly recommend an MLI because the seller has not lived on the property and cannot answer the questions on a survey affidavit.

Here is a sample survey affidavit showing the types of questions asked of the sellers:

What It Costs:

Generally, the price range charged by a surveyor is $250-350 depending on the location of the property.  We order it from the surveyor and only charge you what they charge us.  This fee is paid as part of the closing costs.  You may have to pay it out-of-pocket if the transaction does not close due to the MLI results or other reasons.

We hope this information has been helpful.  If you have further questions, please be sure to speak to your lawyer and/or your realtor about this important issue.  If we are handling your closing, please give us a call at (207) 872-0112.

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