Expert: liznarr - 4/10/2004

Question
I recemtly bought a home in North Carolina. When I had the lot surveyed, I discovered the next door neighbor had built a shed that crossed onto my property by about three feet. I don't really want to cause a lot of bad feelings right off the bat with my next door neighbor. Should I say something? If I don't, what are the consequences for me?
Thanks for any help you can give me.


Answer
Hi Pat,

Absolutely you should address this matter.  And my suggestion would be to NOT delay this matter for too long.

If you were to put your home on the market anytime soon for sale and this problem had not been addressed, you would need to disclose the encroachment to any potential buyers which, of course, would be a turn-off.  Also, title companies generally will not insure over known encroachments.

An extreme consequence if you do NOT say anything to you neighbor is that the neighbor, over a period of time established by law in your state, could possibly assert ownership rights to this portion of your land.

There is a concept in law called adverse possession.  Although we rarely hear of it being enforced, the fact remains that it IS law and a property owner should always be mindful that there are some people who look for ways to profit from the little known, and little used effects of law.

Adverse possession, simply stated, means that if one person uses another person's property WITHOUT the owner's permission … openly, and continuously for a period of years (this period can vary from state to state but is generally a long period of at least ten years, I think)-- the person USING the property can apply to the Courts for ownership rights.  This period of years is continuous and can include several different owners.  

Let's say that the period in your state for adverse possession is ten years.  Let's also assume that this shed had been extending onto the property you just purchased for 9-1/2 years continuously without the prior owner(s) giving permission to the neighbor.  Next, you purchase the property and a period of six months passes without your addressing the issue of the encroachment.  Finally, ten years and one day after the initial adverse possession, you give your neighbor notice to move his shed.  He tells you to take a hike… I think you see where I'm headed.  

The US Courts have always been mindful that ownership of property must be asserted, and the USE and/or regular inspection of property is one assertion.  If someone owns, say, a tract of land in a location somewhat remote or in a location they do not use or visit on a regular basis, it is very wise to INSPECT the property annually to ensure that no “squatters” are using the property (even to the extent of regularly crossing the property, establishing a roadway).

One way for an owner to extinguish any rights of adverse possession is to GIVE permission for use of land, or any portion thereof.

Now that you have some background on adverse possession, I have a few questions for you.  When you purchased your home in North Carolina:

1.   Did you use an attorney or title company to close your transaction?
2.   Did you have a Realtor representing YOU?
3.   Did the Seller provide any kind of property condition disclosure to you?  If “Yes,” was any reference made to encroachments and/or surveys?
4.   Did you put a mortgage on this property?
5.   If “Yes,” did your mortgage lender require title insurance and/or a survey?
6.   If title insurance was required
A.    Was a survey done of your property PRIOR to closing?
B.   If “Yes,” did the survey reveal the encroachment of the neighbor's shed?
C.   If “Yes,” did your closing attorney or title agent point this out to you?

The only sure way to both discover and document an encroachment is by a survey.  If you purchased your home with financing in place, most lenders will require a survey (unless there is one of record recently done … and any recent survey should have shown any encroachment existing at the time the survey was done).

If you had a Realtor, attorney, and/or title company representing YOU, and a survey was done, you should have been made aware of the neighbor's shed encroaching onto your property.  If a survey was NOT done for whatever reason, your Realtor, and certainly closing attorney should have questioned you about NOT doing a survey and pointed out any associated risks to you (of NOT having a survey done).

I hope the above answers your question and points you in the right direction.

Good luck to you, and please write again if you have additional questions.

Regards,

Elizabeth Narr