Disputes around boundary issues and defects are worryingly common and can lead to arduous legal battles. Many can be avoided by being aware of the causes and potential solutions to such disputes, and by going into each property investment fully informed of your contractual rights and responsibilities.
Boundaries can be described as the line dividing two adjoining pieces of land. Determining the boundary of a property is not an exact science, which gives rise to disagreements between property owners. Whilst a boundary line may be marked on a plan in the title documents, this is rarely precise. A physical boundary may follow a different line to the boundary marked in the plan. Ultimately, a boundary can be established by what has been agreed between the property owners and by legal presumption.
Boundary disputes can be difficult to resolve, not just because of their complexity, but also due to deteriorating relationships between the two property owners. When considering where a boundary line should fall, you should always start with the descriptive wording and any plan within the title documents (the conveyance and/or lease, as applicable) and then determine if the position has been changed by:
1) An informal agreement;
2) How the property owners have used and enjoyed their properties previously; or
3) Adverse possession (more commonly known as squatter’s rights).
How To Avoid Boundary Disputes
It is common for owners of neighbouring properties to come to an informal, unwritten boundary agreement. However, this can cause problems in the future, especially when ownership of the property changes hands. To avoid this situation, a written agreement can be put in place when the boundary is initially changed, so that future purchasers are aware of the new boundary line. Seeking legal advice is an option, but the parties could write this agreement themselves and each sign their agreement to it. If you are purchasing a property, it is important that your solicitor asks the seller direct questions regarding the boundary of the property and whether they have any reason to believe that the boundary has changed from the title documents.
What Are Title Defects?
Title defects can be described as issues with the property, which are either patent (i.e. easily discoverable) or latent (hidden). These issues are wide-ranging and can arise in all types of property.
How To Avoid Title Defects
It is essential to conduct property searches before agreeing to purchase a property. Property searches can be categorised into three types:
1) Surveys which are applied for (such as drainage and environmental)
2) Physical surveys (electrical and structural) and;
3) Direct questions to the seller.
The more thorough your searches, the less risk there is of uncovering an unwanted surprise after you have purchased the property. The general principal of caveat emptor, meaning 'let the buyer beware', means that the buyer is responsible for checking that the property is satisfactory. However, if the seller can be shown to have lied to the buyer about a defect in the property, which is later discovered, the buyer may be able to bring a claim against the seller.
We strongly recommend consulting a commercial estate agent and solicitor before considering a property investment, in order to avoid potential disputes. We can’t give legal advice on property disputes, but can help you come to the right decision on the best commercial mortgage to suit your cash flow and growth plans. Click here to arrange a free initial consultation with one of our advisers.
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