What Does “Shortages in Area” Mean When Buying a Home in Texas? Understanding Survey Coverage and Title Insurance

What Does “Shortages in Area” Mean When Buying a Home in Texas? Understanding Survey Coverage and Title Insurance

Written By: Erin Wall, San Antonio REALTOR® with LPT Realty

License Number: Texas - 833167

Date: November 2, 2026

When you're purchasing a home in Texas, there's a lot of paperwork to review. Between the purchase contract, title commitment, survey, and closing documents, it's easy to come across language that sounds important but isn't exactly self-explanatory.

One phrase that often catches buyers off guard is “shortages in area.”

You may see it in the title insurance section of your purchase contract, where you're asked whether you want the standard title policy exception amended to read “shortages in area.”

It sounds complicated, but the decision is really about something fairly simple: what kinds of property boundary and survey-related problems your title insurance may cover.

And while it might seem like a minor checkbox in a lengthy contract, it's worth understanding before you make that decision.

First, What Is a Property Survey?

A property survey is a document prepared by a registered professional land surveyor that identifies the boundaries and certain physical characteristics of a property.

For a typical residential home in San Antonio, a survey may show the lot's dimensions, property lines, the location of the house, fences, driveways, easements, and other improvements.

This matters because what you see when you walk around a property doesn't always tell you exactly where its legal boundaries are.

For example, imagine purchasing a home with a beautiful backyard and a wooden privacy fence. You might naturally assume that everything inside the fence belongs to the property.

But what if the fence was built two feet beyond the actual property line?

Or what if part of a shed extends into a neighboring lot?

Those are the kinds of situations where understanding a survey becomes especially important.

A survey helps identify potential concerns, but it doesn't automatically resolve them. If a boundary issue appears, the buyer may need additional information from the surveyor, title company, or an attorney before deciding how to proceed.

What Is Title Insurance, and Why Does It Matter?

Title insurance is designed to protect against certain covered problems involving ownership rights and the title to real estate.

Unlike homeowners insurance, which generally protects against covered physical damage to a home, title insurance addresses specific risks involving legal ownership and interests in the property.

For example, depending on the policy and its exceptions, title insurance may provide protection against certain undiscovered liens, ownership disputes, or defects in recorded documents.

In a typical financed purchase, you'll often encounter two types of title insurance:

Owner's title insurance protects the owner's insured interest in the property, subject to the policy's terms, exclusions, and exceptions.

Lender's title insurance protects the lender's insured interest in the property. It does not replace the owner's coverage.

But here's something buyers don't always realize: purchasing an owner's title insurance policy doesn't mean every possible title or boundary issue is automatically covered.

Title policies contain exceptions, which identify matters the insurance company is not agreeing to insure.

One of those exceptions involves surveys and property boundaries.

What Does “Amending to Shortages in Area” Actually Mean?

In the Texas Real Estate Commission's One to Four Family Residential Contract (Resale), Paragraph 6A addresses the title policy and its exceptions.

One of the contract choices concerns whether the standard printed exception for survey and boundary matters will remain in place or be amended.

That standard exception addresses matters such as discrepancies, conflicts, shortages in area, boundary lines, encroachments, protrusions, and overlapping improvements.

When a buyer requests that the exception be amended to read “shortages in area,” the buyer is asking for the title insurer to remove much of that broad standard exception, leaving shortages in area excluded.

In simpler terms, the buyer is seeking additional title insurance protection for certain survey and boundary-related risks.

This is commonly referred to as survey coverage or area and boundary coverage.

However, the amendment doesn't mean every survey problem will be covered. The title company must agree to the coverage, and the final policy may contain additional specific exceptions.

What Is a Shortage in Area?

A shortage in area generally refers to a situation where the actual amount of land is less than the amount represented or described.

For example, imagine purchasing a property described as containing 10,000 square feet of land.

Later, a survey reveals that the property actually contains only 9,700 square feet.

That difference of 300 square feet could represent a shortage in area.

Importantly, even when the standard survey exception is amended, shortages in area remain excluded from coverage under that amendment.

So while the amendment may provide broader protection for certain boundary-related matters, it doesn't guarantee that the buyer will be compensated if the lot turns out to contain less land than expected.

This is why reviewing the survey itself is just as important as understanding the title insurance coverage.

What Types of Problems Could the Amendment Help Protect Against?

Let's look at a few hypothetical situations.

Example 1: A Neighbor's Fence Crosses the Property Line

You purchase a home, and several months later, you discover that your neighbor's fence extends onto your property.

Depending on the circumstances, the final title policy, and whether the matter was disclosed or specifically excepted, amended survey coverage may provide protection against certain losses arising from an insured boundary or encroachment issue.

Without the amendment, the standard survey exception may exclude the claim.

Example 2: A Structure Encroaches on Another Property

Imagine purchasing a home with a detached garage. Later, you discover that part of the garage extends across the neighboring property's boundary.

That could create a legal dispute over the structure.

Whether title insurance would provide protection depends on the exact policy language, the survey, and any specific exceptions.

The amendment may provide meaningful additional protection, but it doesn't automatically guarantee the right to keep the structure or eliminate the underlying problem.

Example 3: An Improvement Overlaps an Easement

Let's say a home has a patio or shed that extends into an easement.

If the issue appears on the survey, the title company may identify it and add a specific exception to the policy.

Even with amended survey coverage, that particular matter might remain excluded.

This is an important reason to review the title commitment and survey together rather than assuming the amendment covers everything.

Do You Need a New Survey to Obtain This Coverage?

Not necessarily.

In Texas, the title insurance company may accept an existing survey along with an appropriate affidavit verifying the survey, provided the company considers the survey acceptable for underwriting purposes.

For residential real property, the Texas Department of Insurance identifies Form T-47, the Residential Real Property Affidavit, for verifying an existing survey.

The title company has discretion to determine whether the survey is acceptable, regardless of its age or the person for whom it was originally prepared.

That means an older survey isn't automatically unusable simply because it's several years old.

However, if the survey is incomplete, inaccurate, or doesn't reflect important changes to the property, the title company may require additional documentation or a new survey before agreeing to the requested coverage.

It's also important to remember that the title company's acceptance of a survey doesn't necessarily mean the buyer should ignore visible boundary concerns.

How Much Does Amended Survey Coverage Cost in Texas?

There is an additional premium for amending the standard area and boundary exception in an owner's title insurance policy.

Under the Texas Department of Insurance's Rate Rule R-16, the premium for qualifying residential real property is 5% of the basic title insurance premium, with a minimum charge of $20.

For nonresidential property, the rate is 15% of the basic premium.

The corresponding amendment to a lender's title insurance policy carries no additional premium under this rule.

Here's an example of what that could look like for a residential purchase.

These are illustrative calculations, not quotes for a particular property. The actual cost depends on the applicable title premium and policy.

In the TREC resale contract, the parties can negotiate whether the buyer or seller pays the cost of the amendment.

That decision is separate from determining who pays for the owner's title insurance policy itself.

Should Buyers Request the Amendment?

I think this is one of those decisions that deserves more attention than it typically gets during the homebuying process.

For many buyers, the additional premium may be relatively small compared with the overall cost of purchasing a home. And when you're making an investment worth hundreds of thousands of dollars, understanding what protection you're purchasing is important.

That doesn't mean every buyer should automatically select the amendment without reviewing the details.

The title company should explain what additional coverage it can provide, what exceptions will remain, and whether the property's survey supports the requested coverage.

If there are known encroachments, unusual boundary lines, or other concerns, those deserve closer examination before closing.

My role as your REALTOR® is to help you recognize these questions, understand the transaction process, and connect you with the appropriate professionals. The title company can explain its insurance coverage, while a qualified real estate attorney can advise you about legal rights or disputes.

What Happens If You Choose Not to Amend the Exception?

If the standard exception remains in the owner's title policy, certain losses involving boundary discrepancies, encroachments, and other survey-related matters may not be covered.

That doesn't necessarily mean there's something wrong with the property.

It means the insurance policy may provide less protection if a covered-type problem is discovered later.

And that's an important difference.

A survey may appear perfectly normal today, but a future dispute could still arise over a fence, boundary, or improvement.

The purpose of considering additional coverage is to understand which risks the title insurer is willing to accept and which risks remain with the property owner.

A Few Questions Worth Asking Before Closing

When reviewing your survey and title commitment, I encourage buyers to ask:

• Has the title company accepted the existing survey, or is a new survey required?

• Are there any encroachments, easements, or boundary discrepancies shown?

• Will the owner's title policy include amended area and boundary coverage?

• Are there any specific exceptions that will remain even after the amendment?

• What is the additional premium, and who is responsible for paying it under the contract?

These questions can help you make a more informed decision before closing rather than discovering a limitation in your coverage after you've purchased the home.

Understanding What You're Signing Matters

Purchasing a home involves more than agreeing on a price and securing a mortgage. There are plenty of smaller decisions throughout the transaction that can affect your finances and ownership experience long after closing day.

The survey and title insurance amendment are good examples.

You don't need to become an expert in land surveying or title insurance to purchase a home. But you should feel comfortable asking questions and understanding what you're agreeing to.

As a San Antonio REALTOR®, I believe part of representing buyers well is making sure they don't feel rushed through important decisions simply because the paperwork is unfamiliar.

A little extra attention during the contract and title review process can help you identify concerns before they become much bigger problems.

And when it comes to something as important as the property you're purchasing, those conversations are worth having.