Encroachment

Encroachment: Practical Example

Imagine you are a real estate investor named John who recently purchased a residential property in a suburban neighborhood. The property is situated on a corner lot, with a spacious backyard and a well-maintained fence.

One day, while inspecting your property, you notice that your neighbor’s shed is partially built on your land. This situation is known as encroachment in the real estate industry. Encroachment occurs when a structure or any part of it, such as a fence, building, or even a tree, extends beyond the boundaries of one’s property and onto another person’s land.

Concerned about the encroachment, you decide to address the issue promptly to avoid any potential disputes or legal complications. You approach your neighbor, Mr. Smith, and politely explain the situation, providing evidence such as a recent land survey or property deed to support your claim.

Mr. Smith expresses surprise and apologizes for the unintentional encroachment. He admits that he was not aware of the exact property boundaries and mistakenly built the shed without considering the setback requirements.

To resolve the issue, you and Mr. Smith agree to consult a professional surveyor to accurately determine the property lines and assess the extent of the encroachment. This step is crucial to ensure that both parties have a clear understanding of the situation and can work towards a fair resolution.

After the survey, it is determined that the shed encroaches two feet onto your property. With this information, you and Mr. Smith discuss potential solutions. You could choose to grant Mr. Smith an easement, allowing him to continue using the encroached area as long as he acknowledges your ownership and does not expand further. Alternatively, you may request that Mr. Smith removes the shed from your property entirely.

In this scenario, encroachment highlights the importance of understanding property boundaries and conducting proper due diligence before making any improvements or additions to a property. As a real estate investor, it is crucial to be aware of the potential risks associated with encroachment and to address such issues promptly to protect your investment and maintain positive relationships with neighbors.

Remember, if you encounter a situation involving encroachment, it is advisable to consult a real estate attorney or professional surveyor who can provide expert guidance and help you navigate the legal aspects of resolving the matter.

FAQs about Encroachment in Real Estate Investing:

1. What is encroachment in real estate?
Encroachment refers to a situation where a property owner’s land or structures extend beyond their legal boundaries onto a neighboring property, either partially or entirely.

2. How does encroachment occur?
Encroachment can occur due to various reasons, such as incorrect property surveys, mistakes in property boundary markings, or unauthorized construction projects that unintentionally cross property lines.

3. What are the potential consequences of encroachment?
Encroachment can lead to legal disputes between property owners, as it infringes upon the rights of the neighboring property owner. It may result in litigation, financial damages, or even the requirement to remove or alter the encroaching structure.

4. How can encroachment affect real estate investors?
For real estate investors, encroachment can pose risks and complications. It may affect the marketability and value of the property, as potential buyers may be hesitant to invest in a property with ongoing or potential encroachment issues. It is crucial for investors to thoroughly investigate property boundaries and address any encroachment concerns before making a purchase.

5. How can real estate investors identify encroachment?
To identify encroachment, investors should conduct a comprehensive property survey or hire a professional surveyor. This survey will help determine the exact boundaries of the property and identify any potential encroachments.

6. What steps can real estate investors take to resolve encroachment issues?
If encroachment is identified, investors should consult with legal professionals experienced in real estate matters. They can help navigate the legal process, negotiate with the neighboring property owner, and potentially resolve the issue through agreements, easements, or other legal remedies.

7. Can encroachment be prevented in real estate investing?
While it is not always possible to prevent encroachment entirely, investors can take precautions to minimize the risk. Conducting thorough property surveys, obtaining title insurance, and reviewing property records can help identify potential encroachment issues before investing.

8. Should real estate investors consider encroachment insurance?
Encroachment insurance, also known as boundary coverage, is an optional insurance policy that provides protection against financial losses resulting from encroachment issues. Real estate investors may consider obtaining this insurance to mitigate potential risks associated with encroachment.

Remember, it is essential to consult legal professionals and experts in real estate matters for specific advice related to encroachment or any other legal concerns in your investment journey.