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