This article discusses the rights of neighboring owners of real estate when improvements on one owner’s property encroach on the property of another.

Boundaries violated and hardships balanced

 

Shortly after his purchase of an unimproved parcel of real estate, the owner discovers the garage on his neighbor’s property extends two feet over the boundary line onto his property, called an encroachment. 

The owner demands the neighbor remove the encroachment. When the neighbor refuses, the owner seeks to compel the neighbor’s removal of the portion of the garage which encroaches on his property. 

The neighbor claims the owner is not entitled to a removal of the improvement since: 

·     the encroachment was unknown and unintentional;

 

·     the square footage of the owner’s property affected by the encroachment is minor; and

 

·     the cost to remove the garage would far exceed the monetary loss to the owner if the encroachment were allowed to continue.

 

Can the owner obtain a court order forcing the removal of the encroaching garage, called an injunction? 

No! The encroachment is unintentional and minor in its effect on the burdened owner. Thus, the burden to the owner does not justify ordering the neighbor to undertake an expensive reconstruction activity. 

Instead, the owner is awarded money damages representing the rental value for the lost use of his property, and the neighbor is granted an easement over the owner’s property for the life of the garage. [Christensen v. Tucker (1952) 114 CA2d 554] 

For the neighbor to be allowed to maintain the encroachment, he has to act in good faith when building the improvements, i.e., without knowledge the improvements encroached on the owner’s property. If the neighbor had not constructed the improvements in good faith, the owner would be entitled to an injunction forcing the removal of the encroaching structure no matter how minor the encroachment. 

Also, for the owner to recover money damages for the encroachment, he has to act within the three-year period of the statute of limitations. If the owner delays too long in making his claim, the encroaching neighbor would earn the right to maintain the encroachment without paying any damages at all. 

Even if a new owner of a property burdened by an encroachment seeks an injunction or money damages from the neighbor immediately after acquiring the property, his action can be barred by the statute of limitations. The limitations period does not run from the discovery of the encroachment or the acquisition of the property, but from the creation date of the encroachment. 

Of course, the buyer could recover losses from the seller caused by the seller’s failure to disclose the existence of a known encroachment. The loss would be based on the diminished value of the property and the excess purchase price paid. 

Encroachment, trespass and nuisance

 

An encroachment is an improvement on real estate, such as a building, fence, driveway or tree, which extends onto real estate belonging to another person without his consent. 

Encroachment is closely related to trespass, nuisance and boundary disputes. All involve an interference with another person’s property rights. 

Any encroachment qualifies as a nuisance, be it a permanent or continuing nuisance, since nuisance is broadly defined as any obstruction of another’s use and enjoyment of his real estate. 

An encroachment is also a trespass when it actually rests on the ground of the neighbor’s property. 

However, the names used for an interference are unimportant. One way or another, an owner is entitled to recover for an unauthorized interference with his property rights. 

Rights affected

 

It is not only the fee owner of real estate who can seek to stop an encroachment. Any person holding rights in real estate may protect those rights against outside interference. Thus, the rights affected by an encroachment can include: 

·     leasehold interests [Brown Derby Hollywood Corporation v. Hatton (1964) 61 C2d 855];

 

·     deed restrictions, such as limitations on the height of improvements [Seligman v. Tucker (1970) 6 CA3d 691];

 

·     setback requirements [Morgan v. Veach (1943) 59 CA2d 682];

 

·     easements [City of Dunsmuir v. Silva (1957) 154 CA2d 825]; and

 

·     prescriptive easements. [Warsaw v. Chicago Metallic Ceilings, Inc. (1984) 35 C3d 564]

 

For instance, an owner uses a strip of his neighbor’s property for access to a commercial building located on the owner’s property. After the owner uses the strip for more than five years, the neighbor constructs a warehouse on the strip of land, restricting the owner’s access to his building. 

However, the owner’s use of the strip of his neighbor’s land matured into an easement by prescription. Thus, the owner is able to obtain an injunction against the warehouse improvements as they encroach on his easement rights. [Warsaw, supra] 

Drawing the line

 

The existence of an encroachment is easily determined. All that is needed is a survey to locate the property line. If an improvement on one parcel extends over the line onto an adjacent parcel, it is an encroachment. 

Occasionally, neighboring owners disputing the existence of an encroachment rely on contradictory surveys to establish the property line. If the owners cannot agree on the location of the property line, the boundary dispute must be resolved before any remedy for the encroachment — if one exists — can be granted. 

The resolution of the boundary dispute frequently amounts to no more than a court determining which of the surveys is more accurate. [Iacovitti v. Fardin (1954) 127 CA2d 348] 

However, where the boundary is marked by a physical structure, such as a fence or a row of trees, a survey is not always to be relied on. 

For instance, a common boundary line marked by a fence or other structure is not located on the recorded description of the lot line. Both neighbors treat the fence as the boundary for a number of years. The agreed-to location of the property line is the boundary, regardless of deeds and surveys to the contrary. 

Once an encroachment has been determined, the remedies available to the owner include: 

·     an injunction ordering the removal of the encroaching structure; and

 

·     money damages for the diminished value of the property.

 

Balancing the hardships

 

An owner is entitled to terminate or prevent an unauthorized intrusion onto his real estate. However, when a building or other substantial improvement encroaches on an owner’s property, the neighbor’s cost of removing the encroachment may far exceed the damage inflicted on the owner burdened by the encroachment. 

Thus, the encroachment is allowed to continue and the owner is awarded money damages for the lost use of his property, called balancing hardships or balancing equities. 

The conditions for balancing equities — i.e., merely granting money damages and allowing an encroachment to continue — are: 

·     the owner of the property affected by the encroachment must not suffer an irreparable injury due to the continued existence of the encroachment;

 

·     the neighbor who owns the encroaching structure must have acted innocently and in good faith; and

 

·     the cost to the neighbor of removing the encroachment must greatly exceed the damage done to the owner. [Christensen, supra]

 

For instance, a neighbor’s residence is located close to the property line. The eaves of the house and a bay window hang out over the line. The encroaching portions of the structure can be removed without great expense or loss of value. 

The owner demands the removal of the encroaching structures. 

The neighbor claims removal is not appropriate since the encroachment is minimal. 

However, since the encroachment is minimal and the cost of removing it is small, the encroaching portion of the residence must be removed — tipping the balance in favor of eliminating the encroachment. [Harland v. Noto (1951) 105 CA2d 740] 

An encroachment need not be removed if removal would adversely affect a large segment of the public. 

For example, a reservoir constructed by a water company encroaches on an owner’s property. The owner seeks to remove the encroachment. However, the encroaching reservoir may remain partly because the reservoir supplies water to over 500 homes. [Ukhtomski v. Tioga Mut. Water Co. (1936) 12 CA2d 726] 

Good faith and innocence

 

The good faith of a neighbor who constructs improvements which encroach on the land of another must exist before any balancing of the hardship of removal or remaining can take place. 

The good faith requirement prevents an intentional exploitation of the balancing hardships rule. 

For example, an unimproved parcel of real estate is subject to setback requirements. The owner begins building a residence on the property. 

Soon after construction commences, the owner’s neighbor notices the residence is being constructed within the setback — too close to the property line. The owner is informed he is violating the setback requirements. The neighbor also threatens legal action unless the owner complies with the setback requirements. 

However, the owner does not cease work on the residence. He completes the construction knowing the improvements violate the setback requirements. The neighbor seeks to enforce the setback requirements by forcing the removal of the structure from within the setback. 

The cost to the owner of removing the residence far exceeds the damage to the neighbor. 

However, the owner built the residence with full knowledge of both the setback violation and the neighbor’s objection. Thus, the owner did not complete the construction in good faith and the portion of the structure within the setback must be removed. Had the owner innocently violated the setback requirements, the removal request would probably be denied. [Morgan, supra] 

The encroachment easement

 

When the continuance of an encroachment on the owner’s property is allowed, the encroaching neighbor is granted an equitable easement to maintain the improvement on the owner’s property. Further, the neighbor must compensate the owner for the rental value of the lost use of his property. The easement lasts for the lifetime of the encroachment. 

To resolve one case, the encroaching neighbor sought fee title to the portion of the property covered by his encroachment. However, to grant title would be excessive. Instead, an easement is granted since an easement is sufficient to protect the neighbor’s right to maintain the encroaching improvements and avoid lot line adjustment laws. [Christensen, supra] 

Limitations and delay

 

Normally, an owner seeking to terminate an encroachment or recover money damages is subject to a three-year statute of limitations running from the commencement of the encroachment. [Bertram v. Orlando (1951) 102 CA2d 506] 

The limitations period for an encroachment is the same as for a permanent nuisance since the damage to the owner is complete and certain as soon as the encroachment is created. 

The creation date of the encroachment is the critical date. Whether or not an owner has knowledge an encroachment exists does not affect the statute of limitations. The limitations period runs from the creation of the encroachment, not its discovery. [Castelletto v. Bendon (1961) 193 CA2d 64] 

However, in the rare case where damage resulting from an encroachment is progressive over time, the three-year statute of limitations does not apply from the date of creation. 

For instance, an owner’s building is damaged when a neighbor’s building leans on it, due to a poorly compacted fill. The degree of the tilt, and the resulting damage, increases over time. 

More than three years after the damage commences, the owner seeks to recover his monetary losses from the neighbor. The neighbor claims the owner is barred from recovering damages by the running of the three-year limitations period. 

However, the intrusion on the owner’s building is continuous and progressive — a further intrusion. As with a continuing nuisance, a new claim accrues each time the loss increases. Thus, while the three-year statute of limitations does apply, it does not begin to run on the commencement of the encroachment, but runs from the date of the last increase in damage from the progressively increasing encroachment. [Kafka v. Bozio (1923) 191 C 746] 

In addition to barring relief due to the statute of limitations, an action seeking money damages or an injunction against an encroachment can be barred by the equitable doctrine of laches, also called prejudicial delay or detrimental reliance. 

A property owner loses his right to enforce a removal of an encroachment or recover money against the encroaching neighbor if the owner delays in making the claim causing the neighbor to rely on the owner’s acquiescence to his detriment. 

For example, if an owner discovers his neighbor is constructing a potential encroachment, but refrains from saying anything or taking any action until the construction is completed, he can be barred from enforcing its removal. The encroaching neighbor has relied on the owner’s acquiescence in undertaking and completing the construction. [Rankin v. De Bare (1928) 205 C 639] 

Finally, an owner who allows a known encroachment on his property to continue for over five years risks losing property rights through a prescriptive easement or adverse possession since the adverse use of the owner’s property by the encroaching neighbor is known to the owner and continuous. 

Thus, an owner must act promptly to enforce his right to remove the encroachment or receive compensation for lost value when a neighbor’s improvements encroach on his property.