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When investing in real estate, the last thing you want is a boundary dispute with a neighboring property owner. Enter the realm of encroachment agreements, a legally binding solution that addresses the complexities of property boundaries and shared structures. In this comprehensive guide, we’ll delve into what encroachment agreements entail, when they are necessary, and how they safeguard your real estate interests. 

What is an Encroachment Agreement? 

An encroachment agreement is a crucial and legally binding real estate document designed to resolve property encroachments. Encroachments occur when structures extend beyond property boundaries, often becoming a point of contention between neighboring property owners. This agreement acts as a resolution mechanism, acknowledging the encroachment, identifying its owner, and outlining a mutually agreed-upon solution.

Key Considerations in Encroachment Agreements

  1. Legally Binding: An encroachment agreement is a legally binding document that ensures both parties adhere to the terms outlined. Once registered, it becomes a permanent fixture on the Certificate of Title, providing long-term clarity even after property ownership changes.
  2. Types of Encroachments: Encroachments come in various forms, with fence lines being the most common. Other examples include structural additions, sheds, decks, retaining walls, and even eaves troughs. Identifying these encroachments is crucial in determining the need for an agreement.
  3. Determining the Need for an Agreement: To ascertain if an encroachment agreement is required, a thorough review of the Real Property Report (RPR) is essential. This legal document, prepared by a land surveyor, illustrates property boundaries and any encroachments. Consulting with a real estate lawyer can guide you through the agreement drafting process.

Understanding Real Estate Encroachments

An encroachment, in real estate terms, occurs when a structure from one property extends onto a neighboring property. This could involve homes, sheds, fences, or any other structures. Encroachments may be owned by utility companies, municipalities, or private individuals. The Real Property Report (RPR) serves as a visual guide to identify these encroachments.

Types of Real Estate Law Encroachments

Encroachments manifest in various ways, encompassing fences, sheds, garages, house structures, retaining walls, additions, cantilevers, decks, patios, party walls, driveways, and eaves troughs. Each type presents unique challenges that can be addressed through encroachment agreements.

Ways to Resolve Encroachments

Fixing encroachments involves several options, such as moving the structure, removing it entirely, eliminating the encroaching portion, or entering into an encroachment agreement. The latter is often the most straightforward and cost-effective solution, providing a clear framework for resolution.

Obligations Under an Encroachment Agreement

The terms of encroachment agreements vary, but common obligations include:

  1. Liability: The owner of the encroaching structure is liable for any damage caused to the neighboring property or individuals.
  2. Maintenance: The owner must maintain the structure in good condition and repair.
  3. No Right to Rebuild: In case of replacement, there is no automatic right to rebuild in the same location.
  4. Obligation to Remove: The owner allowing the structure to stay may have the right to force its removal with proper notice.

Risks of Encroachment Agreements

While encroachment agreements offer resolution, they come with inherent risks. Buyers should carefully review agreements on title to understand the terms, especially regarding potential removal of structures. Private agreements may carry higher risk, necessitating thorough due diligence before property acquisition.

How Real Estate Lawyers Help

Experienced real estate lawyers play a vital role in the encroachment resolution process. They can:

  • Draft Private Encroachment Agreements: Tailoring agreements to specific circumstances.
  • Negotiate Agreements Between Neighbors: Facilitating discussions and reaching consensus.
  • Facilitate Municipal Agreements: Handling agreements involving municipalities or utility companies.
  • Register Agreements on Title: Ensuring the permanence of the agreement on the Certificate of Title.
  • Explain Risks and Obligations: Providing comprehensive guidance on the implications of the agreement.

Encroachment agreements are indispensable tools in the realm of real estate, offering structured resolutions to boundary disputes. Whether you’re a property owner dealing with encroachments or a potential buyer navigating these complexities, understanding the nuances of these agreements is crucial for informed decision-making. Smooth real estate transactions start with clarity on property boundaries and a proactive approach to dispute resolution.

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