Maybe this has happened to you …
You’re in the final stages of putting a deal together, and the surveyor discovers the boundaries of the property are different than the seller believed. Perhaps a neighbor’s shed, or raised-bed garden, has crossed onto the seller’s land.
Alternatively, the seller, not understanding the implications, built a structure that crossed into someone else’s yard, and you need help negotiating a solution.
At True Title, we have the expertise to help real estate professionals deal with the issues created by encroachments, easements, and licenses. We want to find ways to partner with realtors to find solutions so that you can get everyone to the closing table.
What’s an encroachment?
When a property owner violates a neighbor’s rights by building or extending a structure (or some other feature) onto their neighbor’s
property, that person is encroaching on the other’s land. Some typical encroachments include:
- Retaining walls.
- Raised-bed gardens.
- Sheds and other outbuildings.
If a survey comes back showing an encroachment, ask:
- Who created the encroachment? Is it the seller or the neighbor?
If the sellers’ property is encroaching on someone else’s land, can the seller correct it by moving or removing the encroachment? If not, what issues will this create in the future, especially if they have built something that falls on public land?
If a neighbor is violating the boundary line, let your buyer know. Will it be a problem? Is the encroachment something the buyer will be unwilling to accept, even if they can reach an agreement?
Furthermore, it’s a good idea to ask:
- Whom does the encroachment benefit? In some cases—retaining walls, for example—could benefit the buyer in the long run.
In some cases, the encroachment is for the sake of the neighbor only, and your buyer will need to decide if they’re okay with it.
- Is there an agreement to allow the encroachment between the current owner and the neighbor? If not, can your buyer and the neighbor reach one? In this case, it’s useful to understand the difference between an easement and a license — both potential solutions for the encroachment.
- How long has the encroachment been in place? If there is not a legal agreement in place, and the encroachment has been in place for ten years or more, an adverse possession issue may exist. (Adverse possession is a legal principle which allows the encroaching party to claim title to the underlying land if certain conditions have been met, time being one of them.)
What’s an easement?
An easement is a legal agreement where the grantor (the landowner) gives the grantee (the neighboring landowner doing the encroaching) permission to use a portion of the land for a particular use. In such an agreement, the two parties agree to specific terms.
First, the easement will state its express purpose: to allow the encroachment to exist. Next, it should answer the question of who is responsible for maintenance of the property where the encroachment is occurring.
In addition, it should state how long the agreement lasts. Is it permanent, or will it have a termination clause? Without a termination clause, the easement will permanently grant the rights given in the document unless the grantee (the person doing the encroaching) releases the easement.
If there is an agreement already in place, find out: Is it permanent? Does it terminate after a pre-determined period? Does it terminate upon a particular event (like the sale of one of the properties)?
Since some easements, such as those granted to utility companies, may be impossible to avoid, it is always important to know your buyer’s long-term plans for the property. Are they planning to install a pool? Build on to the house or do extensive landscaping? Will any easements come into conflict with these plans?
True Title is your expert resource when it comes to easements. They can be tough to understand, and we’re here to help realtors and their clients make informed decisions.
What’s a license?
A license is a legal agreement between two property owners. Like an easement, the grantor (the landowner) gives the grantee (the neighboring landowner doing the encroaching) permission to use a portion of the land for a particular use.
But a license is fully revocable. If the grantor later decides not to allow the encroachment, he or she can terminate the license and require the encroachment be removed.
Realtors who discover that such an agreement exists would do well to speak with the neighbor in question. It’s best to find out ahead of time if that person is easy to work with so you and your buyer can plan accordingly. In some cases, it may be appropriate to request that a true easement be granted.
You’re not on your own!
Encroachments, easements, and licenses can be confusing if you don’t have specialists on your team to help you. True Title’s staff wants to come to your aid.
If you have questions about encroachments on a property, let us know! We’d love to help.