Questions On Encroachment


Question: I have a purchase agreement for my propery from a buyer, but they inform me that I need to deal with encroachment issues before the sale.

Thanks for your time. I am currently selling my home and real estate on Lake Michigan "by owner"

To date:
*There is a purchase agreement between me and a buyer.
*The buyer has had an inspection and was satisfied.
*There have been addendums to the purchase agreement reflecting the following issue.

While looking at the lot and talking about the property’s boundary line and the new neighbor’s (1 year) weeding activities, the Buyer became concerned with encroachment. Some of the Neighbor’s pre-existing landscaping and perhaps 2 feet of fence seem to encroach.

The buyer spent four days speaking to a realtor, a title company employee, the buyer’s mortgage person, and uncle who is a criminal lawyer. The buyer then contacted me claiming it was my responsibility to resolve this issue with a stake survey and a letter of acknowledgement from the neighbor.

I have spoken to the buyer’s mortgage person and the title company about their requirements in this matter.
The mortgage person said the buyer stopped the process before a mortgage survey was ordered and therefore the mortgage company has no requirements. The title company faxed me its requirements for stake survey and none of them apply to this situation.
Currently, all opinions are based on conversation and my 7 year old mortgage survey.
So, my questions are:

Answer:
Question 1: Should I pay for a stake survey?
Answer 1. I recommend you get the survey.

Question 2: If a stake survey shows encroachment. Can I legally remove the encroaching items from my property? Answer 2. Generally the answer is yes.

Question 3. Must I inform the neighbor before removal?
Answer 3. I would recommend it. Also, see my note about agreeing with the neighbor where the property line is and leaving the then "common landscaping".

Question 4. Should I request the neighbor remove all encroachments?
Answer 4. You can do this.

Question 5. Can the neighbor contest a survey and hold up the sale of my home until there is a verdict?
Answer 5. This could also happen.

Question 6. Should I let this deal fall though and wait for another buyer?
Answer 6. You could do this also. Another buyer just may not care. I would however fully disclose the situation to the new buyer before they have made their buying decision. Generally, when problems such as this arise, they will not go away and I recommend that you take care of it now.

Question 7. In the case of another buyer, am I required to disclose a suspected encroachment?
Answer 7. Yes, you would be required to pursuant to the Michigan Seller’s Disclosure Statement.

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You have found yourself in a difficult situation. I always recommend to clients that they obtain a staked boundary survey before buying property. This is often not done, but would have helped to prevent the situation you are in. In your purchase agreement you probably agreed to provide "marketable title". An encroachment or potential claim by a neighbor can be a "cloud" on title. If your Buy and Sell Agreement did not require you to provide a survey, then you are not legally obligated to provide one. However, you have a practical problem that mortgage lenders do not like to make mortgages on property where there is a questionable title. The encroachment creates this question. The buyer can back out because their mortgage lender won’t proceed further. If you want to save this sale, I recommend that you get the survey and correct the encroachment. Yes you can make your neighbor remove encroaching landscaping. Also, you can enter into an agreement with your neighbor acknowledging the correct boundary and the parties agree that the landscaping can stay. That helps to solve the problem without removing nice landscaping that I would believe you both like.

Attorney: Mark Miller

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