Selling Property With Encroachment

What is Encroachment in Real Estate?

Encroachment in real estate is a situation in which a property owner violates the land rights of a nearby property without permission.

Real estate encroachment can be intentional or unintentional. An intentional encroachment occurs when the property owner knows of the unapproved use. An unintentional encroachment occurs when a property owner is unaware or has inaccurate information, leading to unintentional land use.

Types of Encroachments

Property encroachment occurs in various ways, with some of the most common types including the following:

• Fence Encroachment: Fence encroachment occurs when a fence extends beyond a neighbor’s property without permission.
• Driveway Encroachment: Driveway encroachment occurs when a neighbor builds a shared driveway encroaching onto another person’s property without permission.
• Overhanging Trees: Encroachment can occur when a neighbor’s tree extends into someone else’s property.
• Shed Placement: A neighbor who installs a shed extending onto another neighbor’s property may be encroaching.
• Building Extensions: A developer who builds a property onto a neighboring property’s land may be encroaching.

Ideally, sellers should resolve encroachment before listing their home. Otherwise, a title search or land survey may show the encroachment, leading to closing delays or buyers withdrawing.

Identifying Encroachments

Property owners can identify encroachments through surveys, land assessments, or visual inspections. Having your property surveyed involves a professional evaluation of your property line and land so you can determine potential encroachments. 

The owner can also visually inspect the property using physical markers. Identifying property landmarks, such as fence lines, driveway, walls, or boundary line markings, can help a homeowner identify potential encroachments.

Land records don’t explicitly show easement or encroachment information. However, they can still provide information that discovers them.

The Impact of Encroachments on a Property Owner and Potential Buyer

Property encroachment has many impacts, negatively affecting a property’s value and buyer demand. Here are a few things to know about the impact of property encroachment on seller and buyer rights.

Property Rights and Property Line Disputes

Selling a house with encroached land can lead to property disputes between neighbors. These issues may complicate the house title transfer process, so understanding how to clear title issues is critical. These disputes may lead to poor neighbor relationships or expensive legal issues.

Adverse Possession

Adverse possession real estate encroachment occurs when someone else uses someone else’s property for so long that it meets the legal requirements for them to claim ownership. The time to qualify for adverse possession varies, depending on state and county laws. 

However, after the specified time, the encroaching neighbor can claim ownership of the property encroachments.

Impact on Property Value and Sale

An encroachment issue may impact property value and, thus, a property’s sale potential. Potential buyers may not want to purchase a property with known encroachments because of the possibility of disputes and legal issues. Additionally, ongoing encroachment issues can impact a property’s future sale potential.

Homeowners with encroachment issues may also want to discuss their home sale with a real estate attorney. This helps protect their legal rights while discovering resolution options.

Resolving Encroachment Issues

Resolving encroachment issues can restore property value in some cases. Here are a few ways to settle a boundary dispute related to encroachment.

Negotiation and Agreement

Negotiations can sometimes resolve encroached property disputes, especially in cases where the neighboring property may not be aware of its encroachment. The first best course for handling encroachment issues is direct communication. Some neighbors may be willing to resolve the problem promptly. However, when this fails, a legal remedy may be necessary.

Legal Remedies

Legal remedies are sometimes the best option for property line disputes. Property owners can obtain an injunction against the neighbor, leading to a property survey. Legal action can also require the encroaching neighbor to remove the encroachment. In some cases, compensation for damages may be available through legal action.

Boundary Line Adjustment

Sometimes, the property line may need to be adjusted to resolve encroachments. This is usually done through a court order when both parties agree.

A prescriptive easement, a legal right that allows a neighbor to use a property for a specific purpose over a certain period, can also solve encroachment issues. For example, an easement may allow a neighbor to access a part of the property, use a portion of the driveway, access the waterfront, or travel through the land.

Impact of a Real Estate Sale if There is Encroachment

Identifying property line disputes or encroachments can impact the completion of a real estate transaction. Perspective buyers may withdraw from the sale to avoid the hassle. 

Here are a few essential things for sellers to know when selling a property with encroachment issues.

Disclosure Requirements

State and federal laws require sellers to disclose known encumbrances, including encroachments, to prospective buyers. This information should be included in the seller’s disclosure document. Otherwise, the encroachment may be discovered during title review, which could delay or prevent closing.

Sellers can ensure they meet these requirements by working closely with a qualified real estate agent. Real estate agents will create the appropriate documents disclosing the issues with the property’s deed and may help with dispute resolution.

Impact on Sale

A property with encroachments may attract fewer buyers. Encroachments discovered during closing can lead to a real estate sale falling through. To understand more about complex selling scenarios, consider reviewing our guide on selling distressed property for strategies on handling difficult home sales. 

Property line disputes can lead to delays even when buyers agree to continue with the purchase. It’s also not uncommon for the buyer to request a lower price due to the encroachment. 

Sellers with unresolvable encroachments may need to list their property below market value to attract buyers. Encroachments can also limit buyers through financing requirements.

Negotiating with Buyers

Most homeowners don’t fully understand the extent of encroachments on their property until they’re ready to sell. Property line disputes can affect the negotiation process. Buyers may request more concessions or a lower sale price when dealing with property encroachments. The new owner may ask the seller to cover the land survey cost before completing the home sale.

Selling a Property With Encroachment to the Cash Home Buyer

Sellers with property encroachment issues may find it difficult to sell their house. Potential buyers may offer less or withdraw from a sale after learning a property has no clear title.

A cash buyer may be the solution for selling a property with encroachment issues. Cash buyers can make the sales process more accessible and more convenient for everyone, helping to avoid expensive court battles.

Cash buyers offer sellers other benefits, including fewer contingencies and a faster closing process. A cash buyer may be the solution if you want to sell your home on schedule.

Contact A-List Properties at (972) 526-7042 to consider your cash sale options. You can also use our online form to receive a fast cash offer for your house.