What are my options for purchasing a home with my neighbor's detached garage encroaching my property?

Asked by Alfred, 80210 Sun Jul 4, 2010

I have recently entered into a contract to purchase a home in Denver. During the course of due diligence, it was determined that there is a 6” (for 18 feet) encroachment of my neighbor’s detached garage onto my property. As such, my title company will not provide insurance on the encroachment but may issue an exception.
In Denver, how will this impact my ability to obtain a mortgage and how will it impact resale? In a couple of states in which I’ve lived, most lenders will not lend against a property that does not have clear title.

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Carole Higgi…, Agent, Suttons Bay, MI
Tue Jul 6, 2010
Unfortunately this is not a Realtor question but a legal question. We are not lawyers and are not able to give legal advise. You should start with the attorneys at the title company closing the transaction. Find out what they have to say about the issue vis-a-vis title insurance. Then get your own attorney involved- ask him for creative solutions- like maybe you can create a 99 year lease on the ground and record it or maybe you can sell the neighbor that little piece of land and have the lots re-surveyed. I am certain there is a creative solution that can make this little nuisance a win for you. In Colorado the buyer has the right to choose the title company. I would recommend you contact Jerry Spaeth @ First Integrity Title (303-837.9171). He is the attorney owner and is always happy to talk with clients and their Realtors. If you like him and he gives you good info ask to move the transaction to him as having someone at title in your corner for this could be a big help.
Best of Luck to you and don't get discouraged- buying a house is not easy but...you may find that with a little perseverance you can turn all of this around!!
1 vote
Dan Chase, Home Buyer, Texas City, TX
Sun Jul 4, 2010
Selling the land under the garage, or tearing the garage down are the most likely methods of obtaining success here. Then perhaps more land needs to be sold to meet setback requirements (if applicable).
1 vote
Leslie Monaco, Agent, Greenwood Village, CO
Mon Jul 5, 2010

You may want to try and get your agent's managing broker involved on this issue. That may help put your agent's feet to the fire and let them know you are seriously concerned about this matter.

Good Luck!

0 votes
Kimberly Ryan, Agent, Highlands Ranch, CO
Mon Jul 5, 2010
You are correct. most liekly, the bank will not lend on a property without clear title. I might suggest going to the City assessors office and discuss zoning,easements and see if the City can help. If you are ready to move in the near future though, you may wish to "move on" and choose a different home.
Best of luck!
Kimberly Ryan
0 votes
Mary Weaver…, , Glenwood Springs, CO
Sun Jul 4, 2010
If it does not make a huge difference to you, often times these things can be taken care of by doing a lot line adjustment and have the encroaching garage pay to have that survey line adjusted and record. I think this would be the simplest situation. If you are in a city or platted subdivision, you need to get a final approval from that entity too prior to moving forward with the expense of adjusting a lot line. So if you allow that part of the garage deeded to their lot, adjust in front of his lot to your lot to make up the difference or talk to your surveyor on other suggestions and always seek legal counsel before you proceed. Now a days, banks do not want any issues to lend, so be creative with a lot line adjustment to save the deal or walk away and find a property without any issues, there are plenty out there to chose from.
0 votes
Robert McGui…, Agent, Denver, CO
Sun Jul 4, 2010
Alfred, there are a couple of things you can do. First, contact the title company that is closing this transaction. They should provide you with some assurances on this matter, even if they need to bring in their corporate attorneys to give you a ruling. Again, if if the garage has been there for years it probably is not an issue with the current owner and would not affect you as far as your use of the property. The problem is that it would come up again when you attempt to sell the home in the future. These issues can become a nightmare in certain situations. I have seen neighbors forced to move an entire lenth of fence over as much as a foot. But what do you do with a garage?

The other thing I would suggest is to get an opinion from a Real Estate attorney since this really is a legal issue more than real estate. We are not allowed to give legal advice. A good attorney to contact is Oliver Frascona at 303-494-3000. He actually teaches classes on these type of sticky issues and will give you expert advice.

Robert McGuire ASR
Your Castle Real Estate
Direct: 303-669-1246
0 votes
The Kinslow…, Agent, Centennial, CO
Sun Jul 4, 2010
Alfred, even if your lender will make the loan, which I am thinking that they won't, I would want this cleared up before purchasing the home. We are Realtors not Attorneys, when things get questionable like this a good Real Estate Attorney would be worth every penny and will save you headaches down the road. I do know the name of a Real Estate Attorney that I think is very good. Let me know if you want his contact information. I hope this all works out for you and you do get your home.

Sandy Kinslow
The Kinslow Team
Coldwell Banker Residential Brokerage
0 votes
Alfred, Home Buyer, 80210
Sun Jul 4, 2010
Yes, that is what is odd. The neighbor's detached garage is several years old (10+) and the property I have a contract on is a scrape and build new construction. They survey was completed in 2009 so the builder/seller has known about it but has not rectified it.

I am in process of working through my broker on this but I don't feel that he is sufficently concerned. His comment was "not a big deal," with which, myself and a couple of advisers disagree. I and they just do not know local attitidues toward this. However, it is appearing that it is not too dissimilar from elsewhere.
0 votes
Brian Burke, Agent, Highlands Ranch, CO
Sun Jul 4, 2010
You must consult you Realtor on this. I Think you are right and you cant get the loan without the clear title. Has is been sold after the garage was on before or did they build it then sell???
0 votes
Scott Godzyk, Agent, Manchester, NH
Sun Jul 4, 2010
Alfred you can sign an addendum to ask the seller to take care of the problem before you purchase it, even if you get a lender to give you a mortgage and an exception on your title policy, you still will have this hanging over you and worrying you. have them take care of it before you purchase it.
Web Reference:  http://www.ScottSellsNH.com
0 votes
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