When purchasing a new home, one critical step in the process is obtaining a land survey. This survey is essential for identifying potential boundary issues, such as whether any part of a structure, like a shed or a fence, extends onto neighboring property. Understanding how to handle these issues is importnat, especially when it comes to title insurance and legal implications.
The Role of a Land Survey
A land survey provides a detailed map of the property, outlining the exact boundaries and identifying any encroachments. Encroachments occur when a part of a structure crosses over the boundary line into adjacent land. This could involve something as minor as a driveway extending a few inches onto a neighbor’s property or as significant as a shed partially encroaching on adjoining land.
Title Insurance and Boundary Issues
Title insurance is designed to protect homeowners against legal issues related to property ownership, such as disputes over the property’s title. However, it is crucial to note that title insurance will not cover boundary issues identified in a land survey. The rationale behind this is that title insurance policies typically exclude coverage for problems that the buyer was aware of before closing the sale. In other words, if the survey reveals an encroachment, title insurance will not address this problem because it assumes the buyer was aware of the issue beforehand.
Options for Addressing Boundary Problems
When confronted with boundary issues, buyers have three primary options:
Accept the Issue:
For minor encroachments, such as a driveway that extends a few inches onto a neighbor’s property or a small part of a shed that overlaps the boundary, many buyers choose to accept the situation as-is. This option involves moving forward with the purchase without attempting to resolve the encroachment. While this approach might seem straightforward, it’s important to consider potential future complications or disputes with neighbors.
Easement:
An easement is a legal agreement that allows the encroaching structure to remain on the neighbor’s property indefinitely. This formal agreement is binding on all current and future property owners. Essentially, an easement grants a right to use the neighbor’s land in a specific way and remains attached to the land, not just the individual owner. An easement can be advantageous because it provides long-term security regarding the encroachment, but it requires mutual consent from both property owners and formal documentation.
License:
A license is a less formal agreement compared to an easement. It involves the neighbor giving permission for the encroachment but retains the right to revoke this permission in the future. This agreement is typically more flexible and can be tailored to specific needs. Unlike an easement, a license does not automatically transfer to future property owners; it is generally applicable to the current arrangement and can be terminated if the neighbor decides to revoke permission.
The Role of Legal Advice
How you choose to address boundary issues often depends on the advice provided by your real estate lawyer. Some legal professionals might prioritize resolving these issues meticulously, while others may advise proceeding with minor encroachments if they are unlikely to cause significant problems. If your lawyer is making a big deal out of a minor encroachment or if you’re unsure about the best course of action, consider seeking a second opinion. Consulting with another real estate lawyer or contacting your title insurance company for additional insights can help ensure you make an informed decision.
Closing Thoughts
Solving boundary issues when buying a home involves understanding the implications of a land survey and the limitations of title insurance. While title insurance will not cover issues revealed by the survey, buyers have viable options to address these problems, including accepting the issue, negotiating an easement, or obtaining a license. Carefully consider these options and seek appropriate legal advice to guarantee a smoother property transaction and avoid potential disputes in the future.
