Encroachment In Real Estate: Everything You Need To Know
If you’re looking to buy a home, your real estate agent will likely suggest a professional property survey to help identify property lines as well as potential encroachments on your space.
With this in mind, let’s walk through what an encroachment is, the different types of property encroachment and a comparison of encroachments and easements. We’ll also discuss what you can do if an encroachment hinders your home buying process.
Encroachment in real estate is a type of encumbrance referring to when a neighbor builds or extends a property feature such that it encroaches – or intrudes – on or over your property. Whether intentional or by accident, encroachment is a property rights violation that can:
- Complicate the sale of your house
- Cause damage to your property
- Create liability issues
- Compromise your relationship with your neighbors
Property Encroachment Issues
Even if the encroachment doesn’t necessarily bother you, it’s worth considering a couple of factors if you’re looking to purchase a home.
If a neighbor builds something that encroaches on your property due to the use of that structure, you could be held liable. Aside from the possibility of an injury or significant damage, you may have to file a claim with your homeowners insurance. This could result in higher insurance premiums, which are less than desirable.
Even if you’re fine with someone possibly using your property for a specific purpose, it doesn’t mean the next person who lives there will be. A potential buyer who finds out they may have to deal with an encroachment could choose to pass on buying a property or offer less money, so this is important to consider.
Types Of Encroachment In Real Estate
The significance of each type of property encroachment can be measured on a sliding scale. Make yourself familiar with minor, major and structural encroachments to become a well-versed homeowner.
Not every potential encroachment needs to cause great distress. A few encroachments unlikely to have a major impact on insurance needs or resale value include:
- Basketball hoops
- Landscaping that has grown beyond the neighbor’s property line
An encroachment could even be something as simple as a shrub, tree or other landscaping feature that has grown beyond your neighbor’s property line.
Some property encroachment issues should definitely cause a red flag. Construction of a garage or part of a house on your property would fall into this category. Other items that can cause issues are an overhang or a tree branch extending from your neighbor’s land onto your property. Consider the potential for major property damage or serious injury if either lands on something or someone on your property.
Structural encroachment occurs when a property owner specifically builds something on land they don’t own. This issue is typically between neighbors, but it could also be between the property owner and a municipality since streets and sidewalks are often the property of the city for public use.
A structural encroachment could be an upstairs deck or balcony that partially overhangs on your property, or it could be a neighbor’s driveway built to impinge on your property. Garages or sheds would also fall into this category.
Encroachment Vs. Easement
The key differences between an encroachment and an easement are based on mutual neighborly consent and ownership rights. An encroachment refers to unauthorized use without a mutual agreement, but an easement is when two neighbors mutually enter a legal agreement.
An easement starts with something being built on or above your property. The key distinction here is that the neighbor has entered an agreement to access that portion of the property, often for a specific purpose.
Here are a couple of quick examples of situations when an easement might come into play.
- Prepurchase use: Let’s say your neighbor had built a shed on your property before it was fully developed for residential use. You might agree to an easement granting them access to their shed.
- Access use: You might also have a big, shared driveway that your neighbor uses to gain access to their property. This would be another situation when an agreement concerning an easement might be in order.
Depending on state law, though, if a neighbor has used your property for a certain amount of time, they can still gain legal access to the property without your explicit consent. This is called a prescriptive easement.
If your neighbor builds something that’s either partially or wholly on your property without an agreement, it’s considered an encroachment. In fact, illegal encroachment problems that drag on for years may legally allow your neighbor to claim an adverse possession of said property.
If you’re dealing with an encroacher unwilling to concede use of your property, you may want to consult a lawyer who’s familiar with local code on squatter’s rights. Unlike an easement, adverse possession grants ownership rights to an encroacher.
What To Do About An Encroachment
If you’re looking to get an encroachment handled when buying or selling a property, here are a few solutions you can try.
Talk With Your Neighbor
Your neighbor may be willing to move whatever’s on your property over to theirs if it’s easily transportable, like a garden or azalea bush. Often, a friendly conversation can be enough to resolve the issue. However, it might be a good idea to get the mutual agreement in writing or negotiate a legal easement.
If you happen to sell the home, it’s important to let potential buyers know about any encroachment issues you discussed with your neighbor.
Sell The Land To Your Neighbor
Another option is to sell the land being encroached on by your neighbor to your neighbor doing the encroaching. The neighbor doesn’t have to go through the hassle of moving something that may be difficult or impossible to uproot, and you still receive some sort of compensation for the portion of your property that you’d be giving up.
If your neighbor decides to buy the land, consult your mortgage lender and/or a real estate attorney so you can be sure you can do this with accurate land survey records. Your lender also has to be aware since your property serves as collateral for any mortgage you might have.
Go To Court
If you and your neighbor can’t come to an amicable or fair agreement, going to court is always an option. At this point, it’s probably a good idea to get a real estate attorney involved. A judge may grant an easement or make a judgment on the value of the encroached property for the purposes of a sale.
The Bottom Line: Don’t Wait To Deal With Encroachments
Ultimately, encroachments need to be dealt with sooner rather than later. Give your neighbor the benefit of the doubt when you first broach the subject, taking inventory – before reaching an encroachment agreement – of how a potential adverse possession or prescriptive easement might affect your property value.
Ready to begin your journey into the home buying process? Get started with us today and speak with one of our Home Loan Experts.