Neighbor wants to sue me because my property is encroaching on hi

26 Replies

Hey BP family, 

I recently purchased a property in Brooklyn New York. My neighbor recently brought it to my attention that my building is encroaching on his driveway by 6-12 feet. When I was in the process of purchasing the house this issue came up which my attorney brought to my attention. She tried to get the seller's to have the name sign a boundary line agreement with the neighbor which was unsuccessful. I decided to still go ahead and close on the property but the lawyer advised me to get title insurance with a title company that she know, like and trust. I took her advice and got the title insurance!

After I closed on the property, the neighbor reached out to me a few months later and told me he is looking to get compensated for the fact that my property is encroaching on his. He said that he is willing to sign the boundary line agreement but I need to pay him around $40K or more. I really don't want to pay this amount because it's a lot! Plus I have title insurance so I think thats something the title insurance should pay him if he takes me to court and win. The problem is I don't want to go to court and have to pay lawyer fees for years to come which is expensive (my attorney is charging $450/hour). Plus I will not be able to refinance if there is an open litigation against the property. What should I do?

1. Should I try to pay him the money and settle out of court?

2. Should I suck it up and deal with all the fees and headaches associated with him taking me to court with the hopes that the title company will cover the settlement he is looking to get? 

3. Should I pay make additional payments towards the principal knowing that I may be tied up in court because of this litigation so I won't be able to refinance? (P.s I wanted to make additional payments towards the principal so that I can get to 20% equity & refinance to get rid of PMI/MIP. I have a FHA loan).

Thanks for your response Theresa! The house is worth $830K. I already spoke with my lawyer and she said that thinks I should try to get him to sign the boundary line agreement to save the cost and headache of taking it to court but $40K is a lot of money to handover. The survey does show that my property is encroaching on his property

Originally posted by @Gilbert Nyantakyi :

Thanks for your response Theresa! The house is worth $830K. I already spoke with my lawyer and she said that thinks I should try to get him to sign the boundary line agreement to save the cost and headache of taking it to court but $40K is a lot of money to handover. The survey does show that my property is encroaching on his property

You may want to counter that amount with the neighbor. It would be good if the neighbor would take less than the original 40K the suggested and then possibly take it overtime in installments.It doesn’t sound like the neighbor actually has an issue with you as much as they see an additional payday. 

If you and/or your attorney think there's any chance the matter may be covered by your title insurance, submit a claim before you agree to any settlement.  There's probably is a exclusion from coverage in the policy that excludes a loss caused by the insureds entering into a settlement agreement without the written approval of the insurer.

Will title insurance cover when you knew there was a problem when you bought it?  You should try to come up with a comp of the slice of land that he wants to give you for the $40,000.  Unfortunately he's kind of controlling what goes on here your house is on his land.  There's not any kind of law that says how you may take property by use in your state? Sometimes it's by adverse possession or use which is known but not given somebody permission to do it? 

You said it was just a empty lot. Assuming you sign off on the encroachment would it compromise future development of that lot??

Instead of $40k (or less depending on the sellers mood), I'd just try & buy the lot, but again that depends on the cost &/or the potential it has.

Your title policy surely excepted this encroachment from coverage since it was known. Not sure about NY, but in Texas, when no survey is completed, the policy won't have boundary coverage anyway. 

Try to sit with the neighbor to come to a reasonable agreement. Its sad that so many issues have to do with money. If the neighbor has half a brain he or she will understand the many advantages to settling for $5,000 to $10,000 vs. going to court. When negotiating with your neighbor the less you say the better and stick with only a few points. Don't keep adding new fuels to the fire.

The very first thing you want is to get a professional survey and make sure you know where the stakes are placed. Then, you know exactly what you are arguing about. Maybe, you are not encroaching at all, or maybe only 3 feet and that is a huge plus for you.

If you are encroaching on his property then apologize and tell him that you would like to pay him something to avoid going to court and so the issue is settled forever. Then, keep saying the same thing over and over when you say it will save everyone a lot of time and costs to settle for something reasonable like $5,000 or $10,000. Then, if he agrees to $10,000 you know you are hitting close to home and ask if you can settle in the middle for $7500, or maybe that is even too much.

I don't think going to court is expensive for your case. It is super simple and attorneys don't need to spend more than a few minutes preparing for the case. One point I always discuss with the seller is when you go to court you never know what a judge will decide and it is not always what the Plaintiff requests and the Plaintiff also has to fork out cash to take you to court because his attorney is not going to work on a contingency.

I had a similar problem about 40 years ago when I was installing a 240-foot concrete block wall one side of my property. The neighbor told my workers to stop digging because he said we were digging 6 inches too far onto his property. I stopped work, had the property surveyed and it turned out that I moved the wall 12 inches more toward the neighbor's side and he never talked to me one more time before he passed away 40 years later.

Most people don't want to go to court and if you play your cards right you will come out much better by apologizing, first, and then tell your neighbor you want to do what is right, but at the same time you don't want to be the victim in regards to paying more than what is fair.

I would ask why your neighbor waited for you to buy the property before pressing you for some cash. This may mean the issue is not important to your neighbor and he is only spreading his wings and ruffling your feathers.

@Gilbert Nyantakyi . Just remember he will have attorney and court costs too. Something prevented him from pursuing the prior owners. $40k is the ceiling. Negotiate him down. I thought in NY if you have possession of someone’s land for a period of time that you can file to assume possession of that land? I may be mistaken - I am not an attorney.

Perhaps you can tell him that your attorney has a good case since the building plans were approved and both of you will have court and attorney costs exceeding the $40k so maybe he agrees to a much smaller amount or you just leave the situation alone knowing that you will have to deal with it eventually. Let time work on your side.

@Gilbert Nyantakyi , @Joe Martella 's offered good advice to check on whether the N.Y. Adverse Possession statute applies to the facts of your case. https://www.nysenate.gov/legis...   I would still look for a reasonable an amicable settlement, but the time required for adverse possession in NY can be as low as 10 years.  Meaning if your building has been on his property for 10 years, then a court would likely award you that portion of his property.  (be aware of zoning that may require the building to be setback additional feet from the property line in order to be conforming).   

Do check out adverse possession.  It could put you in the driver's seat.  You might be far more able to dictate terms, if any.  You may be able to argue persuasively that you would win in court if it went that far.  You may also be entitled to recover your legal expenses if you win.

Originally posted by @Sherry Goettler :

Will title insurance cover when you knew there was a problem when you bought it?  You should try to come up with a comp of the slice of land that he wants to give you for the $40,000.  Unfortunately he's kind of controlling what goes on here your house is on his land.  There's not any kind of law that says how you may take property by use in your state? Sometimes it's by adverse possession or use which is known but not given somebody permission to do it? 

A standard OTP excludes from coverage matters known to the insured and not disclosed to the company in writing.  However, if a survey was provided for closing which showed the encroachment there may in fact be coverage if the policy failed to take exception for the encroachment. In any case, I always recommend submitting a claim for any matter which could potentially be covered under the policy.  It's up to the insurer to review the claim and the policy provisions and make a coverage determination.  If liability is denied there is the possibility of successfully disputing the insurer's position.

Wow this is why most all Lenders require a survey completed before Closing!

Sad to hear your purchase is what triggered the neighbor to sue for the PRE-EXISTING encroachment; as if it wasn't a problem 'til now'. (Unless they got $ from previous owner/s).


What did your Title insurer say about it?

I am fairly sure title insurance will not cover a situation where you knowingly enter into an agreement to purchase a house that encroaches 6-12 feet. As others suggested, see if adverse possession laws work in your favor. If the house has been there 100 years and the law says ten years, tell them legally you own the land. Just be aware if you don't work this out, it will make it harder for you to sell the property. Most people don't proceed with a deal without clearing a major issue like this. I may just pay them $40K or whatever to get it settled in legal record. 

Originally posted by @Gilbert Nyantakyi :

Hey BP family, 

I recently purchased a property in Brooklyn New York. My neighbor recently brought it to my attention that my building is encroaching on his driveway by 6-12 feet. When I was in the process of purchasing the house this issue came up which my attorney brought to my attention. She tried to get the seller's to have the name sign a boundary line agreement with the neighbor which was unsuccessful. I decided to still go ahead and close on the property but the lawyer advised me to get title insurance with a title company that she know, like and trust. I took her advice and got the title insurance!

After I closed on the property, the neighbor reached out to me a few months later and told me he is looking to get compensated for the fact that my property is encroaching on his. He said that he is willing to sign the boundary line agreement but I need to pay him around $40K or more. I really don't want to pay this amount because it's a lot! Plus I have title insurance so I think thats something the title insurance should pay him if he takes me to court and win. The problem is I don't want to go to court and have to pay lawyer fees for years to come which is expensive (my attorney is charging $450/hour). Plus I will not be able to refinance if there is an open litigation against the property. What should I do?

1. Should I try to pay him the money and settle out of court?

2. Should I suck it up and deal with all the fees and headaches associated with him taking me to court with the hopes that the title company will cover the settlement he is looking to get? 

3. Should I pay make additional payments towards the principal knowing that I may be tied up in court because of this litigation so I won't be able to refinance? (P.s I wanted to make additional payments towards the principal so that I can get to 20% equity & refinance to get rid of PMI/MIP. I have a FHA loan).

 Hi Gilbert,

If insurance does not cover it, how about negotiating for a reduced price, or some kind of payments.

Plus he's your neighbor, maybe throw a something like a Chicken and Dumplings dinner (one of my favorites) with all the fixings into the offer--you know, shake a hand make a friend along the way. He is your neighbor.

Good Luck!

As a few others have mentioned, there is little chance this would be covered by your title policy. If you didn’t get a new survey, the policy would have contained the standard survey exception. If you did get a new survey and this encroachment was revealed by the survey, there is no chance the title company would have insured over it, so the encroachment would have been excepted. Assuming the encroachment has been in existence for a number of years, the adverse possession argument may be your best bet/leverage point for negotiations.

@Gilbert Nyantakyi talk to your attorney, I forgot the exact verbiage but they're is a law if you can prove you have maintained the property for x amount of years, then it becomes yours. I know a couple of guys who have used this to secure land. I don't know how it would now work since your a new owner tho

  1. Sorry you're dealing with this, what a headache. Coming to a resolution quickly, even if it means a payout, is certainly the best solution in terms of the stress involved. 
  2. It would cause you hardship for the neighbor to "take back" their property, so you may have a pretty good case for adverse possession. This is established when a trespasser's possession is 
  3. 1. Hostile (without permission)
  4. 2. Actual (controlling the property)
  5. 3. Exclusive (possession by the trespasser only)
  6. 4 Open and notorious (without hiding occupancy), and
  7. 5. Continuous for the statutory period (varies by state, ten years under NY law)

I would ask your attorney about whether or not YOU need to personally be there for 10 years yourself or whether the structure being there counts, however. Not sure about that... 

I'd probably counter their offer at a much lower amount, see what they say and go from there. Just explain that $40k is a big hit for you right now/ beg mercy. If they don't come down off their price at all, perhaps look into adverse possession. 

@Gilbert Nyantakyi

Good morning

Here is the deal. Have a competent attorney look into the concept of adverse possession, or perhaps an action in order to quiet title .

Adverse possession allows you, in this case, to claim that property as belonging to you, because of the criteria that have been seemingly met over time.

It could be a viable solution and may shut this person down for a long time. The downside is of course legal fees but i doubt they'd come close to 40k asked.

Also, have you made a claim against your title policy, assuming they covered the encroachment/use?

None of my comments should be construed as legal advice. That's what a competent lawyer is for. This is just what I have seen folks do in the past.

Much success.

Bob

Originally posted by @Ryan Nichols :

As a few others have mentioned, there is little chance this would be covered by your title policy. If you didn’t get a new survey, the policy would have contained the standard survey exception. If you did get a new survey and this encroachment was revealed by the survey, there is no chance the title company would have insured over it, so the encroachment would have been excepted. Assuming the encroachment has been in existence for a number of years, the adverse possession argument may be your best bet/leverage point for negotiations.

I've worked on many title insurance claims where a problem clearly shown on a survey wasn't taken as an exception on the policy.  The explanations given by the closers ranged from I didn't see it to I didn't realize it was a problem.  The problems arise because title agents hire closers with a following, a book of business they can bring with them, not because of their extensive knowledge base.  They generally have a following because they get the closing done on time with a minimal amount of controversy and nothing starts a controversy like finding a problem.  Therefore there is an intrinsic motivation on the part of title agents not to find problems.  That's fine for sellers but not so good for the insureds.