Encroachment: What it means in real estate

While you may see a property survey as a straightforward and worry-free component of the homebuying process, it can turn up a whole host of potential issues. One of the biggest issues that you may find during this step is encroachment. The discovery of encroachment issues can quickly throw a wrench into a real estate contract that once seemed like a done deal. So here’s what you need to know about encroachment in real estate and how to deal with it:

What is encroachment?

Encroachment occurs when one property owner has a structure or a feature that is located on or extends onto the neighboring property line. Encroachment can be as minor as a garden or as major as a garage or part of a home addition. No matter the type of encroachment, it could become a serious issue no matter how minor it seems now. This is especially true when it comes to selling the home -- the current owner may be fine with encroachment issues, but the new potential buyer may not be. 

While encroachment can be done intentionally, many times, it is done accidentally. This is especially true if property lines aren’t exactly clear or established, like in rural areas. However, no matter the intention, encroachment could easily become a legal issue and should not be ignored.  

How does encroachment differ from easement?

With this information in mind, it’s definitely understandable that you may confuse encroachments and easements. After all, both of these terms deal with property line issues. That being said, easements are agreed upon by both parties, whereas encroachments are not. While this doesn’t mean that encroachments are intentional, it does mean that they can become an issue in the future. 

For instance, an unauthorized encroachment could become a prescriptive easement -- that essentially means that the unauthorized use can become recognized after a set amount of time, provided that the use is hostile, notorious, exclusive, uninterrupted, and continued. Specifics vary within different state laws, but this is definitely something that you should look into within your state legal code. 

Furthermore, unauthorized encroachment could also become an adverse possession. In this case, the unauthorized user is not only awarded use of the land, but actual ownership. Again, the specific requirements vary by state and should be thoroughly researched before deciding to purchase a home with encroachment issues. 

Different types of encroachment

While encroachment may seem like a rather straightforward concept, there are actually intricacies involved. For instance, there are three different types of encroachment, including:

• Minor encroachment: Sometimes, encroachment involves minor things like fences and gardens. Although this issue will take some time, negotiation, and money to resolve, it’s not something that should make or break a sale since fences and gardens can be moved relatively easily. 
• Major encroachment: Other times, however, encroachment involves more major things like garages, overhangs, or even tree branches. In the case of the garage, this is something that cannot be easily moved and could greatly affect the value of the home. In the case of overhangs or tree branches, these could be liability issues in the event that they fall down and cause damage to the other property. While this may seem far-fetched, it does happen and can cause major issues down the road. 
• Structural encroachment: This type of encroachment involves the construction of structural entities outside of the property line. This could mean building something on a neighbor’s property or on the property of the city. The city typically owns the street and the sidewalk, so structures impeding on these areas could be considered structural encroachments. On the other hand, building a garage or shed over the property line onto the neighbor’s side could also be considered structural encroachment. 

Potential consequences of encroachment issues

Even minor encroachment issues can easily become major problems if they aren’t addressed. Here are some of the potential consequences of encroachment issues to consider when buying or selling a home:

• Encroachment issues may affect the sale of your home and cause a buyer to walk as a result of the property survey. If they find that things that are supposed to come with the home, such as a shed or garage, aren’t actually part of the property, they may decide to withdraw their offer and look elsewhere. 
• Even if the buyer doesn’t decide to walk as a result of an encroachment issue, they could decide to offer less money for the home as a result. After all, the amount they originally offered was agreed upon as a result of features that may not actually come with the home. In order to make up for this, they may choose to offer less money to compensate for the lack of these features. 
• Encroachment issues could also turn into legal issues if you’re not careful. For instance, tree branches can easily fall and damage anything in their path. If your tree branches extend over your property line and encroach upon your neighbor’s, you may become personally liable for these damages. 

While these may seem like big “what if” issues, these things do happen and can be avoided by proactively taking care of encroachment issues long before you sell your home or experience an accident. 

How to avoid encroachment issues

In many cases, encroachment issues can be avoided by knowing and sticking to your property line. While you may not think it’s a big deal for your garden or tree branches to extend over your official property line, this could become an issue in the future when you decide to sell your house. As a result, the best way to avoid encroachment issues is to simply not encroach! 

However, sometimes encroachment is unintentional wherein you may believe that you’re sticking to your property line -- only to later find out that you are not. In other cases, you may acquire a property with encroachment issues with no issue to really avoid them. In these cases, the best way to avoid encroachment issues is to come to an easement agreement with the neighbor about the use of the encroaching features or land. Easement agreements are legally binding and can effectively solve this issue and help you maintain a good relationship with your neighbor. 

How to effectively deal with encroachment issues

Dealing with encroachment issues is never fun. However, there are things you can do to effectively deal with these issues before they escalate. Here are some tips and tricks to follow:

• Have a conversation: Lay the groundwork by simply talking to your neighbor about the encroachment issue. They may not even be aware that it’s an issue in the first place. A straightforward and friendly conversation is a great place to start. Simply state your concerns to your neighbor and propose some potential solutions based on their responses. In order to maintain a good relationship with your neighbor, never be accusatory or angry when initially discussing encroachment issues. Instead, give them the benefit of the doubt and be open to solving this problem in a civil manner. 
• Sell the affected land: Depending on the type of encroachment, reaching an acceptable solution for all sides involved can be difficult. For instance, it’s quite impractical for someone to move an entire garage to their side of the property line. In this case, it may make more sense for you to simply sell the affected land to your neighbor to effectively eliminate this issue of encroachment. That way, the survey records would be accurate and won’t cause issues down the line. You should agree upon a price and also consult a real estate attorney to make sure that everything is done properly. 
• Take the legal route: Speaking of real estate attorneys, taking your neighbor to court over the encroachment issue is another route that you can take if you aren’t able to solve it on your own through an easement or do not want to sell the affected land. Obviously, this option should be a last resort as it can be expensive, time-consuming, and messy. Plus, going to court doesn’t necessarily guarantee a ruling in your favor. As a result, it’s always a good idea to try your hardest to resolve encroachment issues outside of court to save money and preserve your relationship with the offending neighbor. 

Final thoughts on encroachment

Encroachment can be a big impediment within the home buying process. If you’re the buyer, you may want to adjust your offer or even withdraw it as a result of encroachment issues that affect the value of the home. However, due to the conditions of the COVID-19 real estate market we’re currently dealing with, you may want to maintain your offer and move forward with the sale as-is. Working with a qualified realtor like the professionals at Fortune International Realty is key to navigating these issues. In any case, make sure that your real estate agent, lawyer, and Vaster Capital mortgage lender are apprised of the results of your property survey as well as any encroachments and easements found in the process. 

Sources:

Prescriptive Easement Law and Legal Definition | USLegal.com.

How Do I Know Where My Property Lines Are? | Zillow

What Can You Do About an Encroachment? | FindLaw.com