There are lots of responsibilities that come with being a real estate investor. Finding the down payment and closing on your property are just the beginning. When tenants move in, or you start making improvements, many challenges can come out of the woodwork. One of those is an understanding of what is encroachment in real estate.
Encroachment: A Definition
The easiest way to describe what is encroachment in real estate is first to imagine there’s a line drawn in the sand between your property and the adjoining property. Everything belongs to you on one side of that line, and the other side of the line belongs to the neighboring property.
In real estate, encroachment happens when you or the person in the neighboring property crosses that line. You or they will be intruding on the other’s real property without their express permission.
Encroachment can also happen if you, as an investor or property owner, trespass or encroach on public land. You might do this if you extend a patio deck onto community land, put up a basketball hoop that extends onto the street, or have large plants on your property that block the sidewalk.
Encroachments take many different forms:
- Someone builds directly on your property
- Someone creates a structure that extends onto your property
- Someone routinely trespasses on your property
- Someone abuses a valid easement
Different Types of Encroachment
There is a two-fold answer to the question “what is encroachment in real estate?”. There are two main categories of encroachment:
- Trespass: This type of encroachment occurs when the intrusion is to physical land. It could be a fence that is built on neighboring land or a shed that’s been built partially on adjoining land.
- Nuisance: Nuisance encroachment concerns airspace. It might include branches of a tree that are overhanging a neighboring property or a structure blocking sunlight to solar panels.
Why It’s Important You Understand Encroachment as a Landowner
An essential part of property and land ownership is property and land surveys. These are usually performed by professional surveyors. Surveys help determine the value of a property and establish lines and boundaries.
If you’re borrowing money from a lender to purchase a property, they will require a survey to ensure the loan matches its value.
When a survey is done, it’s possible that an encroachment could be identified. Knowing what is encroachment in real estate and understanding the process of resolving any disputes or encroachment will make things less stressful for you.
Is a Property Encroachment Legal?
Encroachments are not legal because they violate someone’s property rights. No one has any right to infringe on another person’s property.
There is, however, an exception. If the encroachment has been in place for many years, the person encroaching may be able to claim the right to the property through adverse possession.
This right requires that the encroachment must have been in place for between seven and twenty years, but the exact timeframe depends on the jurisdiction.
Adverse possession must also be:
- Continuous: Continuous use of the property must be maintained.
- Hostile: No permission for the encroachment was granted.
- Open: You must be able to see the encroachment. It must be obvious and not hidden.
- Actual: It is a real encroachment indicated by a survey that highlights the boundaries.
- Exclusive: The encroacher must act as if they own the area they are encroaching.
Encroachment on Property: Intentional or Innocent?
Something that has to be considered is whether the encroacher knew what they were doing or were completely innocent.
The encroacher may not have known they were infringing or could have been misinformed about the land boundaries. If this is the case, there may be a solution that everyone can agree on, even if that means the encroachment has to be removed.
But what if the encroachment was intentional? There would be legal ramifications if someone encroached deliberately, hoping they’ll get away with it. If they’re not prepared to do anything about it, the encroacher runs the risk of being sued.
Easement vs. Encroachment
Easement and encroachment are similar in that they involve someone taking over a part of someone else’s property. However, they are different in that one is authorized while the other is not.
An easement is authorized, and there is generally a valid reason for someone accessing a neighboring property. Typical examples include laying lines for utilities, gas, or cable along the edge of someone’s property. Permission is not generally required because a grant of easement will apply, allowing access.
Another example that could be relevant if you own a vacation rental is when you give people in an adjoining property the right to walk through your land to have access to a shared beach. On the other hand, you might need to cross through an adjacent property’s land to access your property.
An easement is not a right of ownership. It is just the authority to use a section of someone’s land.
How to Recognize an Encroachment
All property is clearly defined and recognized by a court of law. So it’s more than merely a street address description. A legal description of your property lays down the exact boundaries of the lot, and this information can be found in the property deeds. The information is assessed by a surveyor. They can then define the precise boundaries of a property.
The survey is one way to identify what is encroachment in real estate. Another way is to order a title search. You should do this if you think someone is encroaching on your land. A title search will identify whether any deeds or easements have been granted before the new owner’s ownership. For example, the property’s previous owner may have been given an easement to use part of the land. In addition, they may have been granted ownership of a specific piece of property.
If you’re planning to invest in real estate, it’s a good idea to purchase title insurance when buying the property or land. A title search will uncover any possible deed arrangements or easements, and you’ll then be able to decide whether you still want to buy. It might also help you negotiate a discount if you think this is appropriate.
Should an easement or deed arrangement be missed at this stage, your title insurance would kick in. First, the title company would need to pay damages to the new owner. Then, they’ll have to decide what to do with the newly discovered easement or deed.
Buying a House With an Encroachment
If you’re purchasing a property and discover an encroachment issue, your rights are based on a few key factors. Generally, if the previous owner was aware of the encroachment and tolerated it and you purchased the property knowing it was there, in essence, you agreed to the presence of the encroachment.
Many people will be willing to assume the risk associated with a minor encroachment, but if the encroachment is a major one, most people would be unwilling to take on the problems associated with it.
Many encroachments will not affect the property itself at all. This type of encroachment includes a fence, portable outdoor shed, dog house, or garden spot that crosses a property line. The encroachment might belong to the seller and cross onto the neighboring property or belong to the adjacent property owner and encroach onto the seller’s property.
Major encroachments tend to be more substantial such as part of a house or an affixed building. A garage is one example, and if it crosses the property line, there is potential for severe consequences. A similar situation could happen if a building or part of a house crosses over or violates a government or developer-established setback line. In such cases, the result could be the payment of monetary damages or a court-ordered removal of the structure.
Selling a House With an Encroachment
One of the documents involved in a real estate transaction is a disclosure form or statement. A disclosure helps to establish trust with prospective buyers because it lets them know that you, as the seller, are not aware of any material property defects or any other problems, such as property line issues.
You have to note any issues you might be aware of on the disclosure. Letting potential buyers know of a boundary or lot line dispute could be a problem for you because the buyer’s real estate agent or lawyer will want an explanation before proceeding with the sale.
Certain property disputes are more common than others, for example:
- Properties that share a driveway
- When properties are on a private road
- Plots are an irregular shape, and owners have planted shrubs around the property line
If the property you want to sell is only accessible via a private road located on another person’s property, it can create headaches when it comes to selling. If an easement was never received for the road, access could be shut off at any time.
Landscaping can often blur property lines, which can have ramifications if the potential buyer plans to remodel in the future.
Can an Encroachment be Removed?
Technically, you can legally remove an encroachment if it is a private nuisance. However, removing it might not be the best way to handle the situation and could be a significant undertaking. In many cases, it’s often better to work with the neighboring property owner to try to resolve the problem together.
Removal could be impractical, and it might be simpler for the neighboring property owner to fix the problem. If the problem is a shed, for example, it’s something that could be removed with few issues, and the other property owner might be more than agreeable for it to be done.
If the encroachment is a more permanent structure, such as an additional room on a house, another solution may be more agreeable. If removing the encroachment is not possible, there are other remedies, for example:
- Sell the encroached upon property to the neighbor
- Written, legal permission to use the property
Ideally, the last resort should be legal action, but it can be costly and might not go the way you want. The best-case scenario would be for the court to grant an ejectment action. This allows you to remove the encroaching structure. Alternatively, the court could grant a prescriptive easement in favor of the other owner. However, if the encroachment has been there for a long time, the court may give the disputed property to the neighboring owner because of adverse possession.
What Can Be Done About an Encroachment?
If you have an encroachment issue that you want to handle before buying or selling a property, there are a few solutions worth trying.
Talk to the Owner of the Neighboring Property
They may be willing to move whatever is on your property if easily moved, such as a tree or shrub. Often, a friendly conversation will quickly remedy the issue.
Sell the Land to the Neighboring Property Owner
Another option worth considering is to sell the land that’s being encroached upon. The neighboring owner won’t have to go through the hassle of moving anything. You’ll receive some compensation for the portion of your property you’d be giving up.
If the property owner next door is willing to buy the land, check that this is possible by consulting with your mortgage lender or a real estate attorney. Your lender needs to be aware because your property serves as collateral.
Go To Court
If an amicable or fair agreement is not an option, a court is the last resort. If you want to take this remedy, getting a real estate attorney involved is a good idea. The judge will have several legal remedies available, including granting an easement or making a judgment on the value of the encroached property for a sale.
Now you understand the basics of encroachments, you must appreciate that they should be dealt with as soon as possible, and the best course of action is to use tact.
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