I'm doing some analysis on a local 3/2 house. The preliminary numbers make sense as a buy and hold; however, this property shares a driveway with the neighbor, yet no agreement is in place. How much of a liability is this? Should the lack of legal agreement simply be factored into the offering price, or should it be a show stopper? Should i simply try to get an agreement with the neighbor in place before purchasing it? Thoughts are much appreciated.
I had an experience in Pennsauken, NJ where I had just flipped a house, found a buyer, contracts were signed, and closing was just around the corner, when this issue cropped up.
I knew the driveway was shared but never gave it a second thought, in my naivete, when I purchased it.
So, the bank for the buyer required us to create an agreement for the use of the driveway that the other person and the new buyer would both have to sign before the deal could go through.
Fortunately, I was able to formulate an agreement that the existing neighbor agreed to - sweating bullets because the sale depended on his cooperation- and that the bank/buyer agreed to. Both had to sign it and have it notarized.
I think that one thing that helped was that my partner and I had befriended the neighbor, repaired the gutter on the shared garage, offered to clean up trash in his yard, and were generally friendly to him during the course of the renovation. What goes around comes around, as they say.
But you should definitely research this before hand. It could have been a show stopper for us.
There is a legal agreement whether the owners realize it or not. There is an easement that has been created.
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