BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
Fence on Neighbor’s Property
Q: I just listed a home for sale that has a fence along the back of the property. When the “For Sale” sign went up, the rear neighbor approached the seller and stated that she believes that the fence between their properties is about two feet on neighbor’s property. My seller asked me what he should do about that. This is the first that the seller has heard about this and doesn’t even know if the neighbor is right.
A: This happens frequently when a neighbor sees that the adjoining property is going to be sold and thinks this is the perfect time to put the selling neighbor on notice of the lot line issue so that any new buyer will be on notice of the fence intrusion.
Recommend to your seller to have the lot line surveyed to determine the location of the actual lot line. This is the only way to determine whether the neighbor is correct.
If the fence is on the neighbor’s property:
A. It is best to deal with the situation before getting into a contract with a buyer because it may take considerable time and money to resolve the issue with the neighbor. Usually, a buyer is going to want to have the issue resolved prior to the close of escrow.
B. The seller can just move the fence back to the true lot line, or attempt to negotiate with the neighbor for an easement. This latter option takes time and money because, to do this the right way, seller will have to hire an attorney to negotiate and draft a written easement for recording and also hire an engineer who prepares the map to be recorded with the easement. Often the neighbor wants some money for the easement as well.
If this situation arises when you are already in escrow, you must immediately tell the buyer and attempt to resolve the issue with the neighbor, which may require an extension the escrow. Or, perhaps the buyer may choose to cancel based on this new disclosure if there is going to be a lengthy process to resolve the issue with the neighbor. On the other hand, the buyer may choose to close escrow and deal with it later.
Frequently, a seller may be upset upon finding that the fence is actually on the neighbor’s property because the seller believed that the fence was the boundary line when they bought the property. The seller may claim that they have a prescriptive easement to that strip of land on their side of the fence.
Whether or not your seller has perfected a “prescriptive easement,” which would give him a right to continue to use the strip of land of the neighbor’s property inside the fence, is a fact-based inquiry which is different in each situation.
For more information see the Weekly Practice Tips entitled
“Prescriptive Easements” and “Fences”
PRACTICE TIPS
Listing Agents:
1. When faced with a disclosure by a neighbor regarding any lot line issues, immediately advise seller that it is best to determine the accuracy of the allegations by hiring a surveyor to map the actual lot line.
2. If seller wants to negotiate with the neighbor for an easement, or try to claim a prescriptive easement, seller should be advised to consult with a real estate attorney to give advice on the best course to resolve this. Seller should be prepared for the expense of the attorney and the engineer, as well as a possible sum to be paid to the neighbor to agree to a recorded easement against their property.
3. If you are already in escrow when the neighbor provides the statement about the lot line issue, immediately inform the buyer’s agent, and also advise seller to get the survey and consult with an attorney.
4. NEVER state to a buyer or their agent that a fence, retaining wall or other marker represents the boundary or lot line. It is safer to assume that they do NOT actually represent the true boundary line. Note the various industry advisories that make this very clear, such as the CAR Buyer Inspection Advisory (form BIA) paragraph E.2, and the Statewide Buyer Seller Advisory (form SBSA) paragraph 2.
Buyer Agents:
1. If you learn of a lot line issue while your buyer is in escrow, ask the listing agent for as much information as they have. Is there a survey? What does seller plan to do about the alleged lot line issue?
2. If seller is planning on just moving the fence back to the true lot line, discuss that with your buyer who will have to agree to such a move since the lot will now appear to be smaller than it originally appeared, even though there may have been no representation that the lot line was where the fence is currently located. Advise your buyer to consult with an attorney as to their options, especially if they are thinking of cancelling.
3. If the seller is going to attempt to negotiate a written easement, be aware that process will take time and likely will require an extension of the close of escrow. Discuss this with your buyer who may choose to cancel the contract rather than agree to an extension.
4. If your buyer has any questions where the lot lines might be, ALWAYS advise your buyer that the only way to determine boundaries is by a survey. Buyers are entitled to conduct a survey as a part of their due diligence investigation of the property.
WEEKLY PRACTICE TIP: DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
© Copyright Broker Risk Management 2012 04/06/12