A Primer on Encroachment Agreements
An encroachment agreement is an agreement that is intended to allow one person to trespass on a property owned by another person, and can arise in numerous scenarios. For example, if you own a piece of land completely enclosed by another piece of property, it is possible that the property cannot be accessed via public roads and passage through the other property is inevitable to reach the property in question. The property owner has two possible remedies: he or she can make an exception for the other person to traverse the property without trespassing or allow his or her neighbor to cross a portion of his or her land. A similar incident can arise when a water pipeline or other structure is required to be placed underground; agreeing to allow access to the pipeline to retrieve it is often done via an encroachment agreement .
Some encroachment agreements may be utilized for a variety of legal purposes that are only tangentially related to the physical occupation of a property. One common example of this is the case of a landowner whose property is adjacent to a body of water. The landowner may wish to enter into an encroachment agreement with a water management agency by which the agency agrees to preserve a predetermined portion of the adjacent land as wetlands, while the landowner agrees to preserve the land as wetlands in exchange for the right to build certain structures on the land that are otherwise prohibited by their local zoning laws.
When is an Encroachment Agreement Necessary?
Both encroachments and agreements are fairly common in real estate. But the vast majority of property owners will not come across an encroachment that requires a formal, legally binding agreement of either sort. However, there are definitely some cases in which an encroachment agreement is necessary: A boundary line dispute or fence dispute exists: Most often, encroachments occur right at or near the boundary line. This sometimes leads to disputes between the two property owners, especially if they become sort of "fence wars." Where such disputes exist, problems can be avoided by explicitly agreeing that physical structures may be constructed that extend beyond the property line to the other property. (At least in the case of a fence; as discussed below, this is different with an encroachment of a building.) A structure will be built or added to a property: If a property owner or tenant wishes to build a new structure (or add to an old one) that will extend beyond the property line, an agreement should be made with the affected adjacent property owners so that the matter is clear. Again, perhaps the horizontally projecting addition or structure could be temporary, movable, or convertible to accommodate future changes. A neighbor has a valid easement: In most situations where an easement—or more accurately, a prescriptive easement—exists, an encroachment agreement is not necessary. However, in some cases, the easement could be implied, or the scope of use of the easement is unclear and an agreement could be used to clarify the extent of its rights over neighboring property. An encroachment agreement can essentially be used to do one of two things: (1) To settle a dispute between two or more neighbors regarding the extent of any encroachment across a mutual boundary; or (2) in the case of a permitted permission, to allow a neighbor to encroach onto your property. In this context, an encroachment agreement is similar to a boundary line agreement in that it will serve to "google" and document the parties’ agreement with respect to the encroachment for both of their benefits.
The Major Elements of Encroachment Agreements
An encroachment agreement is a legally binding contract between the property owner and the trespassing party. These agreements typically contain the following key components:
Property Description
The encroachment agreement should describe the property subject to the trespass. This may be simply the lot or parcel number, tax ID number or legal description.
Terms of Agreement
The agreement should describe how long the agreement will run. It could be for a term of years, as long as the trespass exists, until the law changes, and many other possibilities.
Rights and Responsibilities of the Parties
The agreement should describe the rights of each party. Is the trespasser required to maintain the easement, or does the easement belong to the trespasser? Does the property owner have the right to request removal of the encroachment at any time? The agreement should document as much as possible, to avoid arguments later.
A Listing of Encroachment Agreement Examples
To give you a few examples of the types of encroachment agreements you may be dealing with, let’s cover two situations: mutual encroachment and trespass encroachment.
Mutual Encroachment Agreement
Let’s say you and your neighbor realize that the fence is not on the boundary line and is encroaching 1 foot into your yard, where there is a flower bed. You both like the fence, and it’s pretty simple to just move it over a foot somehow, so you decide to put in a legal agreement that formally gives up your rights to move the fence. That’s a mutual encroachment agreement. You each give up some future rights you have, and agree that the fence will stay as-is. It will be "minor encroachment."
A big caveat in these types of encroachment agreements, though: You may not want to pay to remove a structure or object like a fence that was put there by the trespasser, if it’s the trespassing party’s responsibility to do so. If the fence is on your side of the property and you want it back, it may be your responsibility to pay to take down the fence and reinstall it on the boundary line. Or you both take down the fence, and share responsibility for re-constructing it. Sometimes this can be worked out amicably, other times, it may be on you.
Tip: When doing encroachment agreements, make sure that the "responsibility" language is specific.
Trespass Encroachment Agreement
There are encroachments on neighboring property that aren’t agreed upon by both parties at the outset and that result from trespass. A good example is when a pool contractor is cutting through your yard (and neighbor’s yard if it’s mid-point) when entering the back yard to install a pool. The pool company may not be able to access the backyard, since many yards are fenced in. You may decide to move your fence temporarily to help the pool installation process. Leave the fence in the same place as it was, but just move the fence temporarily for access to the pool contractor. In these cases, you may ask your neighbor, and they will agree to move the fence temporarily over a few feet, and you can build your fence when the project is over, and there may be no formal encroachment involved at all.
The Legal Aspects Surrounding the Agreement
Encroachment agreements come with their own set of legal considerations. Both parties are legally bound by the contract to honor the rights and representations therein. As a general rule, they can’t be unilaterally changed unless there’s an agreement between the parties to allow it. However, should one party or the other violate the terms of the encroachment agreement, the other has certain legal recourses – especially in California. Encroachment agreements, when recorded, are generally treated as a form of property right, so those that violate the terms of the agreement can be found in violation of the law relating to real property matters . For instance, described in California Civil Code Section 801, the definition of an encroachment is "a physical object that intrudes onto the property of another." As such, a neighbor who places an object over a property line without the consent of the owner can be required to remove the object – even if it was put there accidently. Additionally, a neighbor whose fence is forward of the line extending from the front of the house to the back, can be required to pull it back behind the property line as well. In both cases, the property owner has a lawful right to force the removal of the offending object.
Tips for Making the Best Encroachment Agreement
The process of drafting an effective, yet legally enforceable, encroachment agreement may vary from province to province. However, some great tips to keep in mind are: First and foremost, both the encroaching landowner and the impacted landowner should be clearly identified in the encroachment agreement. Clearly identifying the impacted landowner is key, and adding a legal description of the property on the landowners’ certificate of title is a simple way to do so. Identifying the encroaching landowner can be completed by inserting a short form legal description of their property, such as Lot ___, Block ___, Plan ____, Registration Number _____. The next important step in ensuring that you have a legally enforceable encroachment agreement is to ensure that the agreement is signed and stamped by all affected parties. If a lien or charge exists on the land that the encroaching landowner is encroaching onto, then the encroachment agreement must be signed by the lender, mortgagor or corporation holding the charge or lien. It is sensible to have the encroachment agreement signed and stamped by all affected parties, including any neighbours. If the encroaching landowner fails to remove the encroachment after the expiry of the encroachment agreement, the impacted landowner has the right to seek an injunction ordering the removal of said encroachment. The impacted landowner may also seek damages for the encroachment. In the event that the encroachment is affecting the common property of a strata corporation, which is owned by all strata lot owners of the strata plan, or is common property owned by a company of strata lot owners, it is crucial to note that the encroachment agreement must be signed by each strata lot owner or person that has a registrable motion allowing them to act on behalf of the remaining lot owner(s) for it to be legally enforceable. This highlights the benefit of appointing a company to represent a set of strata lot owners rather than having all of the owners sign and register the encroachment agreement.
How to Resolve an Encounter-Making Dispute
In the context of the encroachment and encroachment agreement, disputes can arise over the interpretation of rights granted by the encroachment agreement, over its duration and, in some cases, over its validity. In many cases, parties will elect to resolve such disputes through one or more of the following forms of alternative dispute resolution: Conflict and dispute resolution methods are often effective because they allow the parties to preserve future relationships, although this form of dispute resolution is not always the most expedient or cost-effective method for resolving the dispute. If an alternative form of dispute resolution is not an option, the parties will often resort to litigation. An Ontario Superior Court decision in Boeing Canada Coporation v. C.D. Howe, 2004 CanLII 16009, is a good example of the outcome when a court is required to interpret the provisions of encroachment agreements. Parties that resort to litigation should be aware that the court may order a party to compensate the other for its reasonable costs of defending or prosecuting the action, which often, depending on the magnitude of the dispute, may amount to substantial financial burden on the parties.
The Advantages of a Solid Encroachment Agreement
A well-structured encroachment agreement may provide clarity on ownership and liability for the structures.
Some encroachment agreements may include indemnification clauses identifying the responsibility for damages to, or destruction of the encroachment. That would be supplemented by the usual civil liability principles, including for example, trespass over the lands of the other property owner without consent or authority or where the encroachment is found to be a permanent structure on the land. This kind of agreement would also provide certainty and streamline actions for injunctions or other remedies for non-compliance.
A well-structured encroachment agreement can also have the beneficial effect of quieting the disturbance or disagreement between the landowners. Disturbance between landowners can play out much like a family feud where property and heritage can become mixed with a long-standing form of animosity. A well-structured encroachment agreement can , therefore, not only provide the peace for the landowners, but also for the wider community.
A well-structured encroachment agreement can also increase the fair value of the encroaching property by providing legal certainty of what structures are permitted to be built on the lands of, or the airspace above the width of the easement, as required by the encroaching owner. Such modifications can increase the fair market value of a property that was previously reduced in value by the potential for an injunction preventing renovations to upgrade infrastructure or utilities on a property that may be encroaching.
An encroachment agreement can also prevent wasted objected to permitting time and costs on both sides if a new structure is constructed without the consent of the other landowner.