By Patton VanVeckhoven

Parties to a real estate transaction are often surprised to discover, via a survey or title commitment, that a fence or other structure actually crosses a property boundary line, creating the potential for a question of ownership.

Title companies generally will not insure title to strips of land between boundary lines and fences, causing potential for barriers to closing.  The title commitment will take exception to coverage in Schedule B with an exception similar to the following:

“Any claim, right, or assertion of title by the adjoining land owner in and to that strip of land located between the property line and the fence, as shown on survey dated 2/6/2017…”

One reason title companies make this exception is that the neighbor’s use of the property may have developed into a claim for adverse possession, or into a prescriptive easement, among other reasons.  Title companies will generally remove the exception if furnished with a boundary line agreement between the owners of the two properties, in which both parties agree that the boundary line is the line shown on the survey and not the fence line.

Further, the owner who has the structure encroaching on the property will also be required to waive any interest he may have in the strip of land at issue.

As a buyer, it is important to engage an attorney to thoroughly review both your title commitment and survey, as well as any HOA documents that may exist.  Once you buy the property, any question or dispute is now your problem and could lead to costly litigation.

In most cases, both parties will not mind signing the boundary line agreement, because neither party likely realizes the error and neither party wants to go through the trouble, burden and expense of making such a claim.

In the event the seller and corresponding neighbor refuse or are unable to enter into a boundary line agreement, the buyer will likely have the option under the purchase contract to terminate the contract.

Because it may take some time to have the boundary line agreement agreed upon and executed by the neighbor, a real estate attorney should be engaged to prepare the agreement as soon as the boundary line issue is detected, as well as review the rest of the title, survey and HOA documents.