BIC TIP #1123: Encroachments Can Kill a Deal
Encroachments are one of those issues brokers sometimes notice but hope will “work themselves out.” That is a mistake.
An encroachment is any fence, driveway, shed, structure, or improvement that crosses a property boundary or encroaches into an easement. While buyers and sellers may be willing to overlook it, lenders and title companies often will not.
If a lender or title insurer refuses to insure over an encroachment, the transaction can grind to a halt or fail entirely. No loan. No title policy. No closing.
This is why brokers must flag potential encroachments early, not the week of closing. Survey lines that look off, fences that do not align, driveways that cut across neighboring property, or structures sitting in easements should immediately raise a red flag.
Brokers do not diagnose legal solutions and do not promise outcomes. The correct response is to advise clients to consult a qualified real estate attorney and, when appropriate, a surveyor. Early legal guidance gives clients options. Late discovery removes them.
Remember, failing to identify and communicate a known or suspected encroachment can expose brokers to complaints, claims, and disciplinary risk.
Spot it. Flag it. Document it. Then hand it to the professionals who are licensed to solve it.
