What our eyes see can deceive us. When it comes to buying a property, natural and human-made barriers aren’t always trustworthy when determining official boundary lines. Getting a new boundary survey is the first step to defend against an unpleasant property surprise, but a survey isn’t any good if you can’t read and understand it.
Homeowners find out a part of their backyard isn’t theirs
Recently, an entire neighborhood of homeowners in Holiday, Florida, found out that a mysterious land trust owns a 20-feet-wide parcel stretching behind several homes. The trust purchased the piece of land in a tax deed auction back in 2008. The homeowners thought they either owned or had a right to use the land by way of an easement. One homeowner received a trespass warning forbidding her to step on the property to access her shed, and another must either tear down his above ground pool or make a deal to purchase the strip of land behind his house.
None of the homeowners know the person’s name behind (818) 239-2215 Land Trust and the legal threats. The only name publicly attached to the trust is attorney Joseph Perlman, who explained the land trust was created to protect his client’s identity who owns the oddly shaped parcel of land.
Many of the affected homeowners purchased a land survey documenting what they thought was their property or easements they had a right to use.
Frank Schneider, the pool owner, realizes that he doesn’t actually own any of the land behind his home. While he obtained a land survey before closing, he didn’t know how to read it. While there is a 10-feet easement directly behind his house that he may use and maintain, as a first-time homeowner, he didn’t realize that the fenced-in backyard where he built the pool wasn’t a part of his property.
Niki Reschar, the homeowner with the shed, also obtained a survey, which documented the Land Trust’s property as a “vacated easement” where her shed and pool pump are located. Based on this survey, she was advised she could use and maintain the property, but she’s now been trespassed by the Land Trust after four years.
How are boundary disputes settled?
It’s uncertain what will happen next for these homeowners, but much depends on a few factors. Depending on the specifics of each situation, one or more of the following could occur:
- Title insurance may cover litigation.
- Accept or offer a deal to purchase or sell the land.
- State laws may automatically create an easement by prescription or adverse possession.
- Pursue quiet title action.
Check Your Title Policy
In addition to a land survey, homebuyers will want to ensure they have purchased a homeowner’s title policy covering their interest in a boundary dispute. Ideally, homebuyers will hire an experienced real estate attorney before buying a property.
Suppose you didn’t hire an attorney at closing and now find yourself in the middle of a land dispute. In that case, the first step is contacting a real estate lawyer to provide a professional analysis regarding who is encroaching on whom’s land, how much land is affected by the encroachment, and whether permission to encroach was ever given.
No two cases will be the same, but a favorable outcome will depend heavily on your title policy’s specific coverage and the legal description described within it.
For example, two New Hampshire homeowners purchased a property near a waterfront, which included an explicit easement to use the adjacent lot for water access. The adjoining property owners eventually brought a quiet title suit against the couple. After the couple’s insurer denied their claim to indemnify them, they took their insurer to court.
In the case, the judge ruled in favor of the couple because the title policy listed the appurtenant easement. The court stated, “the policy insures the Desjardins’ interest in the easement.” The ruling continued that if the insurer wished not to provide coverage for the easement, it should not have included the easement in Exhibit A’s description of the land covered by the policy.
Having determined that the policy covered the Desjardins’ right to use the easement, their insurer was obligated to defend them in the litigation. The judge notes, “Not only did [the insurer] refuse to represent the Desjardins’ interest in the litigation, but it also refused to invoke any of its other options set forth under item 4 of the policy’s conditions. That was plainly in breach of its obligations under the policy.”
The title policy will provide clear guidelines on how the title insurer should handle any legal issues regarding boundaries and easements and what remedial steps should be taken.
Make a deal to purchase the disputed property
Some title policies may not cover boundary issues, especially if a new survey isn’t completed before closing. This type of non-coverage is listed in the title commitment as an exception. A title insurer’s obligation to defend and indemnify a homeowner is dependent on whether such exceptions are listed in the policy.
In cases where title insurers aren’t obligated to cover litigation costs, offering to purchase or sell the piece of property in dispute may be the best option. Before making a deal, you should consider doing the following:
- Conduct a new survey to determine the official boundaries and where encroachments exist.
- Get an appraisal to determine the market value of the piece of land in dispute.
- Have a professional title search conducted to determine if any easements or deeds are listed in the public record granting possession or use of the disputed land.
It’s not uncommon, especially in rural areas with limited public access roads, for previous property owners to have granted an easement to neighboring property owners or even deed the property to the neighbor. The likelihood of this occurring increases when new owners come into possession of a property through a quitclaim deed instead of a sale. Because a property’s financed purchase requires a title search, these issues are usually discovered by the title company, and such title defects can be cleared before closing.
Niki Reshcar, the Holiday homeowner who was trespassed, made an offer of $2,000 for the piece of land beside her home but was turned down. While she obtained a survey, it didn’t list the Land Trust property at all. It’s unclear whether she purchased title insurance that will cover potential litigation.
Obtain permanent easements
In some cases where land rights and use is in dispute, state laws may create either an easement by prescription or adverse possession. These laws vary by state and are complicated, requiring the consultation of a real estate attorney. In Florida, an easement by prescription is created when one owner has openly used and possessed another’s land for 20 years.
For adverse possession, possession “shall mean that the land has been cultivated, improved, enclosed or protected.” Often called “squatter’s rights,” adverse possession typically happens when a person who has no initial claim of title or ownership builds improvements like fences or other apparent boundaries. If the legal owner does nothing to stop the “squatter,” then the passage of 20 years bars the valid owner from taking legal action like eviction. The squatter can then go to court to obtain official title rights.
While a prescriptive easement doesn’t require uninterrupted or daily use of the land, adverse possession does. A prescriptive easement will not transfer any title rights but instead will legally protect an individual’s right to use the land.
Alternatively, an easement can be created by:
- court order for necessity
- seized by the government for the public good
- written instruments recorded in the public record
A judge may reject both adverse possession and prescriptive easement if the owner can establish that the possession or use was permissive. Still, the burden of proof rests affirmatively on the owner. Attorneys advise landowners to take proactive measures to terminate the possession or use before 20 years elapses, explaining why the Holiday homeowners were served official notices about the encroachments and trespassed.
Dispute Boundary in Quiet Title Suit
If private negotiations to either discontinue use or possession of the land or an offer to settle doesn’t resolve the dispute, an official complaint may be filed in circuit court to “quiet title.” A judge will decide the new boundary and enter a conclusive and binding order for the current and future landowners.
At this point, an attorney should already be familiar with the specifics of your case. Still, additional research and paperwork like legal briefs and exhibits will drive up the cost of resolving the boundary dispute quickly. Depending on the circumstances, settling out of court may be in the best interests of both parties. The court may initially require you to attempt mediation to settle before proceeding.
If mediation is unsuccessful, your title insurer may cover the fees associated with the quiet title action, or you may be able to recoup your expenses from the opposing party. The more likely best-case scenario of quiet title is the property’s title will be awarded to you free and clear but at high legal costs. The worst-case scenario would be to lose the right to use or possess the property and owe significant fees, so homeowners should carefully weigh the property’s value against the potential costs.
