BIC TIP #1292: Marketable Title, Move It or Lose It

That fence, shed, or driveway sitting a few feet over the property line is more than a neighborly quirk. Stephen Long, your Notorious BIC, reminds brokers that an encroachment is an encumbrance, and it can compromise the marketability of title. When it comes to encroachments, the rule is simple: move it or lose it.

Marketable Title Means No Surprises

Marketable title means the property is clear of encumbrances that would give a reasonable buyer pause. An encroachment, whether it is the seller’s improvement crossing onto a neighbor’s land or the neighbor’s improvement crossing onto the seller’s, is an encumbrance.

So for a seller to deliver marketable title, they cannot have unresolved encroachments hanging over the deal.

Why Sellers Should Worry

The seller has agreed to convey marketable title. If they cannot address or remedy an encroachment, they could potentially be in breach of contract. That is a bad place to be, and it usually shows up late, after a survey comes back or the closing attorney starts digging.

Brokers on both sides should take encroachments seriously the moment they come to light. Waiting and hoping it works itself out is not a strategy.

Everybody Wins When It Gets Fixed

Resolving an encroachment is in the seller’s best interest, and it is also in the neighbor’s best interest. Nobody benefits from a cloud on title that lingers for years. Ideally, the parties work together, the encroachment is removed or otherwise resolved, marketability is restored, and the closing happens without a hiccup.

How it gets resolved is often a legal question. When the solution involves agreements, boundary issues, or recorded documents, bring in a real estate attorney.

The Practical Takeaway

If you discover an encroachment on a property you are buying or selling, flag it immediately, explain to your client how it affects marketable title, and help get the right people involved, including the neighbor and an attorney when needed. The goal is a clean title and a smooth closing. Move it, or risk losing the deal.

This BIC Tip is general real estate education for licensees and consumers, not legal, tax, or financial advice. Rules and forms change, so verify current NCREC rules, MLS rules, and standard forms, and consult a North Carolina attorney or qualified professional about your specific situation. See Disclaimers & Disclosures.