What Is an Encroachment Agreement?
An encroachment agreement is a legal document utilized in the context of real property law to mitigate disputes between adjacent property owners. An encroachment typically arises when one person builds or is allowed to build upon a piece of property, thereby intruding on the rights of an adjoining property owner. For instance, if a property owner constructs a fence, shed, driveway or curb on land that crosses into a neighbor’s deeded land, the neighboring property owner has the right to demand that the encroaching structure or feature be removed. Rather than remove the offending feature, both parties can agree to allow use of the land and set forth their respective rights and obligations concerning the affected parcel of land in the form of an encroachment agreement. Encroachment agreements are typically utilized in one of two scenarios: (1) where land has been inadvertently encroached upon (due to boundary line miscalculations, surveying errors, etc . ) and the landowner does not want, or cannot afford, to move the encroachment but also does not want to lose their fee simple interest in the encroached land or (2) where land was intentionally encroached upon by one property owner and the property owner who has been encroached upon joins in approving the encroachment, recognizing that the encroachment is beyond his or her control and may be the best option to provide access to or preserve an easement for the encroachment. Commonly the encroachment that is permitted in these circumstances is a driveway, fence, sidewalk, curbing or gate, which an adjoining property owner may use without being subject to a trespass claim. Encroachment agreements are typically drafted in contemplation of future use and can be tailored for a broad range of issues including but not limited to: maintenance and upkeep, repairs, insurance, liability, costs, and default (e.g. a breach of the terms set forth in the agreement). Encroachment agreements may be recorded, and a written encroachment agreement is always preferred over an oral agreement.
Essentials of a Sample Encroachment Agreement
To begin, the encroachment agreement should explicitly state the subject property’s address and parcel number. The address will be used to identify the property, whereas the parcel number is a unique identifier for the property as recorded by the tax assessor. In addition to identifying the property, the encroachment agreement should identify the parties to the agreement, which will include the parties whose properties were burdened by the encroachment, the party burdened by the encroachment, and any third parties involved in the encroachment (e.g., the HOA). Once all parties are identified, the encroachment agreement should describe the encroachment. The description should be specific enough to allow parties to locate the area in which the encroachment exists. For example, it should be clear whether the encroachment extends over the boundary line or further into the other property. The encroachment agreement should specifically state any physical structures on the property that cause encroachment; for example, it should state whether the fence is the cause of the encroachment or whether a tree branch hanging over the fence is the cause. It should also state whether there have been any improvements since the encroachment began. The encroachment agreement should also contain any legal obligations shared by the parties that would allow the encroachment. For example, it is common in homeowners associations for the HOA to require that certain types of structures be removed due to restrictive covenants. Finally, the agreement should state how the encroachment may be resolved. This could include the removal of some or all encroaching items, contribution for the cost of constructing a wall, or the like.
Legal Effect of Encroachment Agreements
When dealing with real property interests, intentions are often open to interpretation. As a result, a written agreement outlining an understanding between parties is always preferred. A comprehensive written agreement serves to eliminate or reduce questions surrounding the obligations of the parties and their respective rights. When regarding Real Property, one such agreement is an Encroachment Agreement.
An Encroachment Agreement is a site-specific contract wherein the parties agree to what can and cannot be built on, under or over the Land and provides the developer with an opportunity to negotiate the appropriate terms and conditions regarding the use of the adjoining lands at issue. From an Owner’s perspective, it is a positive way to protect its investment and property interest. Of course, like most contracts, while the parties can come up with creative solutions and provide for creative remedies, an Encroachment Agreement or Encroachment License does not and cannot alter the legal rights to the lands in question.
There are legal implications when creating and/or entering into an Encroachment Agreement as it is normal for both real property rights and statutory rights to play a role in the interpretation of the rights granted.
In the absence of a contract which specifically addresses the rights of the parties, in situations where the storage of construction materials or the installation of hangers, fire escapes, exterior mechanical equipment and other encroachments onto others property is involved – a party may rely on the doctrine of "fair and reasonable use" (or balancing of convenience) to govern the rights and obligations of the parties.
Where a right exists at law (as articulated in the legal doctrine), such use shall be deemed reasonable notwithstanding the fact that there may be interference with the enjoyment of the Land. Where no right at law exists, it becomes necessary for the court to balance the convenience of the owner of the servient tenement (i.e. the Encroachment Grantor) as against the benefit to the owner of the dominant tenement (i.e. the Encroachment Grantee). The law grants limited protection to a party in the event that the "balancing" dictates that the Encroachment Grantee’s enjoyment of his property and any construction thereon shall be restrained or the encroachment removed. In that instance the law permits the Encroachment Grantee to be compensated for its damages, thus limiting its potential for loss. However, the remedy will be limited to the "value" of the land so any improvement made by a Grantee may be lost.
It is important to note that a developer will normally want the freedom to build a structure encroaching onto lands, whereas the abutting landowner will prefer having his land free and clear of any rights potentially given to them by the Grantee. And this is where the possibility of litigation can come in.
The law provides, in limited circumstances, that the preferred Encroachment Grantee (i.e. Builder) can be compensated for its damages. However, there are substantive limitations to the rights provided to a party under the legal doctrine noted above. And a Builder’s claim may be restricted even further where s/he breaches the Encroachment License.
Where a Builder breaks the terms of the Encroachment license, notwithstanding the fact that its construction on the neighbor’s land was reasonable and consistent with the intent of the doctrine of reasonable use, the Builder puts itself in an onerous position where it may lose the value of its construction.
One of the purposes of the Encroachment License is to protect the unwary from Neighbourhood squabbling. Nothing is more dangerous an agreement to place a holdover release on the builder under the contract. A fundamental purpose of the Encroachment Agreement is to limit the Builder’s position to that encapsulated in the Agreement. And, unless a waiver is readily enforceable in law, a party should proceed with caution when determining the nature and scope of any encroachment onto the neighboring lands.
How to Write a Sample Encroachment Agreement
- Always always obtain the legal description for the property for both your lot and the property which is encroached upon.
- If the encroachment is in the form of a structure, also obtain a diagram or drawing of the structure itself and/or better yet, photographs of the encroachment.
- If the encroachment is in the form of a fence, obtain information regarding the type of fence and how the fence is built, you may even want a drawing or photograph of the fence.
- Explore the history of when the encroachment occurred and how the encroachment happened. If it is possible to have witnesses to the event(s), such as neighbors, do so. The rule of thumb is the older the encroachment, the more difficult to have witnesses supporting your position.
- Make sure that you identify the initial intentions of the parties regarding the encroachment, if necessary by clearly relating the intentions to the encroachment to a deed which the parties will sign. This may come across as some sort of easement, right-of-way or license.
- Make sure that the sample encroachment agreement is drafted properly so as not to become a prescriptive easement (we will discuss what a prescriptive easement is later in this article.
- The sample encroachment agreement must be signed, notarized and then recorded with the county recorder where the property is situated.
Encroachment Agreement Samples for Reference
Dispute Resolution:
The sample encroachment agreement provides a clause for dispute resolution, outlining that any disputes arising under the agreement shall be adjudicated by a court of competent jurisdiction in the county where the encroachment is located.
Here is a sample:
"Any dispute arising out of or relating to this Agreement shall be adjudicated in the courts of [County] and both parties irrevocably consent to the jurisdiction and venue of such courts."
Maintenance Responsibilities:
Another important aspect of an encroachment agreement is who bears the responsibility for maintaining the encroachment. The sample encroachment agreement includes a clause that places maintenance obligations on both parties , specifying that the landowner must maintain the property and the entity undertaking the encroachment must maintain the encroachment area.
Here is a sample:
"[Landowner] shall at all times keep and maintain all of the [abutting Property] in good and clean condition. [Permitee] agrees to maintain, repair and keep neat and tidy the Encroachment Area."
Duration of the Agreement:
The sample encroachment agreement provides a clause that specifies that the agreement is binding and in effect until both parties have fulfilled all their obligations under the agreement.
Here is a sample:
"This Agreement shall be binding upon the parties hereto and their respective successors and assigns from the date first above written until fully executed and performed."
Common Errors in Encroachment Agreements
When drafting contracts, language is critical, and the same is true with encroachment agreements. Poorly worded encroachment agreements may lose the intended protections of the Covenant. In some cases, poorly worded covenants can even create rights that did not previously exist. For example, if an encroachment agreement only contains a legal description of the property, it may be unenforceable for failing to adequately identify the land and contain a sufficient legal description.
Similarly, the covenant should specify a precise width of the road or right-of-way along with exact specifications to ensure that the road is well maintained. If a travelway is laid with gravel or large stones, the encroachment agreement should indicate who is responsible for maintaining the road and for what use the road is to be maintained. Often, the dominant tenement may expect the road to remain open for broad use, while the servient tenant prefers that use be limited to the business purpose. Conflicts and future disputes are avoided with careful drafting.
Encroachment Agreement Forms and Guides
Online platforms and services have emerged as powerful tools to assist homeowners in drafting a custom encroachment agreement. For instance, Rocket Lawyer, LegalZoom, and Noala offer encroachment agreement templates that can be tailored to specific circumstances and needs. Legal resources provided through legal aid services can also be of assistance . Beyond the court system, legal aid organizations offer free legal services to low-income persons who cannot afford to seek legal help for civil matters, such as real estate licensing and boundary line disputes. State or local bar associations or county courts may offer free or low-cost, standardized legal forms for a wide array of matters, including encroachment agreements. For example, the San Diego County Bar Association provides pro bono legal assistance to those individuals who cannot afford to hire a lawyer.