 | Jeff Otto is Branch Manager of Lawyers Title Insurance Corporation which is a member of LandAmerica Financial Group, Inc., a premier national provider of title insurance and settlement services. Lawyers Title has been in the local marketplace since 1955. Jeff has been with Lawyers Title for 34 years, the last 24 right here in Wichita. You may contact Jeff at (316) 682-9600 x 201 or by e-mail at jotto@landam.com |
Real Estate
2006-06-01 09:12:00
Where are my property boundaries?
Question: Where ARE The property boundaries?
ANSWER: You love the building's location, and you like the wooded conditions on the lot of this home you're thinking about buying, but you can't quite determine where the property boundaries are. Is the neighbor's fence in the right place? And what about the location of his backyard building? It's amazing how many innocent-looking situations can turn into nightmares when buyers don't take the proper precautions to double-check property boundaries. So let's talk about what to look out for, what steps can be taken to protect yourself in a purchase agreement, and possible remedies for solving possible property boundary problems.Many encroachments of neighboring fences, sheds, and other buildings can be seen with the naked eye during a cursory observation. For example, one of the first things a real estate agent does when listing a property for sale is to visually inspect the property boundaries. If the agent notes any discrepancies or potential abnormalities, he might reference a plat map and the legal description, measure the property boundaries, and/or suggest that the seller contact a professional surveyor. But sometimes encumbrances are more subtle. Especially when involving bare ground, without any improvements. Surveys are often required to right wrongs or further clarify boundaries that have possibly been changed by adding fences, landscaping, or other actions sometimes caused by Mother Nature. Why would a survey be necessary? Let's say that a property boundary along a fence line was in question. Until the seller knows definitely where the property boundary lies, the real estate agent cannot know the true value of the property and/or whether or not it can be sold without potential title insurance problems. He or she also cannot represent the proper boundaries to a potential buyer. And finally, the agent cannot know if potential challenges to the title could come from the owner of the encroaching fence. So if you were to purchase this property without taking the proper precautions, you could be buying all of the seller's headaches, perhaps at a premium price. How can you best protect yourself in a purchase contract if you sense that the property boundaries need to be clarified? Your first step is to gather all the information you can about the problem. Was it created by someone maliciously trying to encroach on the property, or did it happen innocently? Is the seller aware of the problem? And if the seller agrees to provide a survey, will he or she be willing to do whatever is necessary to right the wrongs found? This is often the most time-consuming piece of untangling the problem, since it requires both the seller and the other party involved, i.e. the encroacher, to work together, hopefully in a timely fashion. Second, make sure you write the purchase agreement so that it is contingent upon receiving satisfactory, acceptable, and verifiable information about the property boundaries. This could include a survey and/or a title company interpretation, and then have that documentation reviewed by your own professional surveyor or real estate attorney before removing the contingency. If you're going to be the person the problem shifts to if it's not remedied, then make sure you're happy with the findings before you part with your leverage in this deal. What if a property boundary problem is found that can't be remedied? Although this is fairly rare, you still might choose to purchase the property. Because of the problem, the property value could have decreased and/or the seller might need to make some other concession to even out the risk. One last thing. Be sure you talk with a title company about the availability of title insurance, especially if you're planning on constructing a home on the lot. An encroachment problem hanging out there in the wind might render title insurance unavailable or available only at a premium price. It could also have a bearing on your ability to obtain a mortgage loan.
