The surface object is used as a base for all calculations. The geometry should be single sided, with normals facing upwards. The topology should be simple, clean and uniform, a plane object would be ideal, but complex terrain objects can be used as a surface as long the topology is clean and low poly.
The surface should NOT contain double faces, flipped polygons, zero area triangles or holes. It is recommended to use Terrain tool under modify surface tab to add holes and other terrain assets.