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  1. #1
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    Default Buyers Demand Lot-Line Adjustment or Will Not Close on Adjacent Bank-Owned Property

    My question involves real estate located in the State of: Idaho.
    The neighboring property is owned by a bank who has been trying to sell the 100 yr. old home for months. The buyers have discovered that half of the garage lies on our property and that there is no easement for the septic tank which is located on our property.

    A surveyor has yet to detmine the exact amount of the property in question but it is a pretty sizeable piece. We have owned this property for 12 years and always thought the line was 5 ft. off the side of their garage and that there was an easement on our property for their septic tank. The realtor contacted us today to ask if we'd be interested in a settlement for a lot-lind adjustment. We may be in a position to profit from this situation but I do have questions about it. Namely:

    1. The property was sub-divided after a divorce around 1990 and since then both the original owner and subsequent owner "thought" they owned the land under their garage and "occupied" it as such.

    2. We have been paying taxes on that portion of land since we bought our property in 1999 as the survey shows the line was incorrectly drawn.

    3. I don't know the Adverse Posession laws for Idaho and how this will affect us.

    4. If no one will buy the property from the bank without if we won't agree to a settlement and a lot-line adjustment where does that leave the bank?

    5. My husband says "Pigs get rich, hogs get slaughtered", meaning we don't want to push for too much and end up with nothing. On the other hand, I don't want to agree to give away what may amount to 1/10th or more of an acre without getting what it's worth if indeed the bank is in a position of having to tear down the garage, move the driveway, and install a new septic system if no one will buy the property otherwise.

    What say you?

  2. #2
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    Default Re: Buyers Demand Lot-Line Adjustment or Will Not Close on Adjacent Bank-Owned Propre

    There is probably a stack of paper a foot high on this already.

    We can't see it or read it here but here is my take on this as a non attorney and not a licensed surveyor in Idaho:

    The fact that the surveyor hasn't rendered an opinion yet is important. You need to wait for that, if it ever comes.

    The fact of a divorce in the 1990's is probably immaterial. The property will be likely divided as to shares, and not according to some split by a surveyor ordered by a court.

    The location of the garage, and septic system may already be provided for by law. You need a local attorney to advise you on that.

    Paying the taxes on the land if it was incorrectly described is likely immaterial.

    Adverse possession regarding a 100 year old propriety and it's garage could be very significant. Neither a surveyor or a court will be eager to move long established boundaries.

    If you withhold agreement the bank has a fully staffed legal department to deal with this. Do you?

    Your husband might actually be on the right track here. I would only recommend that you get your own attorney for advice, as the bank has one or more on staff. Your attorney can advise as to your prospects, and handle negotiations.

  3. #3
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    Default Re: Buyers Demand Lot-Line Adjustment or Will Not Close on Adjacent Bank-Owned Propre

    Your husband's advice or gut instinct is right on. As a surveyor, I saw a huge red flag as soon as I read "100 yr. old home" and "half of the garage lies on..."

    If the garage is the same age as the home, it is highly unlikely that half of it is one one property and half on the other and that a court would force the owners to move it or to purchase any property to make it all be on one property. It is more likely, depending upon the line it is supposedly over, that the court would declare the original true location of the line to be at some other location accommodating the garage, or to recognize title of the portion of land on which the garage sits to exist with that of the property that the corresponding house sits on under one of several potential legal theories.

    If the line that the garage supposedly straddles is one of the original lot lines, or one of the lines of the parcel that existed prior to the subdivision that occurred as a result of the divorce in the 1990s, it is most likely that whoever determined the location of that line to run through the garage did so incorrectly, possibly resorting to a mathmatical method called proportioning before properly considering all of the pertinent physical evidence, measuring from an incorrect point, or perhaps making incorrect measurements from a correct point.

    If the garage is straddling the line created as a result of the 1990s subdivision, then it is most likely that the line was described incorrectly. When I worked in WA, they allowed Short Plats (minor subdivisions) which were based entirely upon record information and not on a field survey. A lot of minor subdivisions were done this way by people thinking they were saving a lot of money by foregoing a survey. A Short Plat done as part of a divorce settlement, and especially one which creates lines that conflict with long existing improvements was most likely one such subdivision.

    If the case were going to be decided in court, the court will strive to give effect to the intent of the original parties. If the lines defined and described in the parcel split of the 1990s were never marked on the ground, and this recent survey is the first attempt to place those lines on the ground, then the conflict with the previously long existent improvements (80+ yr old garage at the time of the parcel split) uncovered by this survey represents a "latent defect" or "latent ambiguity". That means it is a conflict which is not apparent on the face of the record documents (deed and/or map), but only appears when the terms or subject matter of those documents are attempted to be put into effect. In this case, the subject is the location of the boundaries, and the defect is the conflict with the garage. If this describes the situation fairly accurately, both landowners have a problem in that the lines defined by the Short Plat conflicting with long existing improvements create a cloud on each of the parcels.

    The fact that both you and the previous occupants of the neighboring property always thought the line to be in a location which accommodates the garage lends credence to the idea that the Short Plat was drawn in error. The surveyor does not have the authority to determine whether the actions of the landowners give effect to an intent other than that clearly indicated in the deeds and map, but he can and should be able to identify the circumstances where an intent other than as apparently indicated in the documents may be likely. The surveyor can facilitate an administrative remedy (Lot Line Adjustment) if both parties agree to recognize that there is an error or ambiguity which mst be corrected and can agree on the appropriate remedy.

    Rather than looking at this as something akin to a long lost rich uncle having named you in his will, it is probably as much in your best interest to clear this issue as it is in the neighbor's (or the bank that holds the note). The issue is more immediate for the other landowner (or bank) now, but left unaddressed, the issue will negatively impact your ability to sell your home or possibly to get a mortgage on it should you ever want to do either.

    Get the advice of a local attorney who handles real estate matters, but my experience as a surveyor says that you aren't going to get much, if any monetary compensation for this. If all parties are reasonable, the bank owning the other property will cover the expense involved in effecting a Lot Line Adjustment (go for an equal area swap), and both properties get clear title with you paying little to nothing to have the problem solved.

    If you think you can get a first class Hawaii vacation out of it, go ahead and push it. If you have enough money (likely several tens of thousands of dollars) to cover the legal expenses, it may get to litigation. If it gets to litigation, the court will seek to settle the matter by finding the best indication of the true intent of the parties. It being highly unlikely that the parties intended to place a line through the existing 80+ yr old (at time of subd) garage, the court will be unlikely to immediately recognize the platted lines as correct without considering extrinsic evidence (that outside the documents). The strongest such evidence will be the conduct of the parties (initial landowners and any subsequent landowners) as to their use and recognition of where the line has existed. The subdivider(s) did not tear down or move the garage and did not install a partition wall, incdicating they did not intend it to be split by a created property line. If the owners of both properties have apparently never recognized a line through the garage, and have treated the line as if it has existed about 5' off the side of the garage, it is quite likely that a court will view that as a practical location of the true line and view the plat to be in error. If it happens that way, not only would you not get paid anything for the property in dispute, you would also likely lose the opportunity to make an agreement that would ensure that you got an equal potion of land in trade somewhere else along the line, and you would be stuck with your own legal fees. In other words "hogs get slaughtered". But on he positive side, you would then have clear title, so it would be that much easier to get a 2nd mortgage with which to pay your legal fees. (OK, sorry for the sarcasm)

    You have been paying taxes (probably) on whatever parcel number of the Short Plat, not necessarily on the amount of square feet or acres, or even the parcel dimensions indicated on the map. If a court were to determine that the plat was drawn in error, then it would be saying that the lot never was sized and shaped to include land under the garage and although you have been paying taxes on that same lot, it may not have been quite as large on paper as you've thought it was, but it is exactly the size on the ground as you've always recognized it to be, and not several wider to a line you never knew about so as to include part of the neighbor's garage.

    The legal staff for the bank will recognize all of this, and they will also be aware that they have more resources ($ and lawyers) with which to press the issue if need be. Negotiate wisely, don't let them roll over you, but don't get greedy. Hope to come out of it with clear title, good neighbors, and without expense to you. Consider it a bonus if you come out of it with money to pay for a nice weekend away to the mountains or the coast.

  4. #4
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    Default Re: Buyers Demand Lot-Line Adjustment or Will Not Close on Adjacent Bank-Owned Propre

    It's difficult to imagine that this will be litigated. With a foreclosure, odds are the bank is selling the property "as is". If the prospective buyers don't want to close without resolving the boundary line issues, I expect that they'll walk away.

    If somebody were to litigate the issue, I would expect the court to allow the structure to remain in place out of concern for 'waste', with the order being somewhere between "they have a license to maintain the structure until it is ultimately demolished, should that occur, with reasonable compensation to the title owner" and "they have title by virtue of adverse possession and/or acquiescence." If you don't want to give up any land, consider offering the minimum - an easement for the continued use of the structure until such time as a new garage is to be built. It's difficult to tell you how much to ask for, save for "if they want title, ask for more than if they're simply asking for the formalized right to maintain and use the garage." The value of the properties and the size of the lots can factor in.

  5. #5
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    Default Re: Buyers Demand Lot-Line Adjustment or Will Not Close on Adjacent Bank-Owned Propre

    Thanks everyone for your advice. It is really helpful advice and I like being able to get a grasp on the legalities of what we're facing here. As it's true we always believed the line to be 5' off the garage there is no essential"loss" to us if we have to sign something agreeing to that. What you said about the actual lot line vs. what was intended makes total sense. No one in their right mind would have divided a parcel straight up through the garage.

    Although what LandSurveyor and eapls2708 said makes complete sense, I tend to agree with Mr. Knowitall in how I believe the situation will fall out. If we got stubborn don't think the bank would care to take anything to court and incure the costs involved with litigation. Since we really aren't concerned with where the actual line is except for the fact that there's an outside chance we could benefit from it financially we have no interest in taking this thing to court.

    The septic issue is a little more interesting in that the buyers who are waiting for the property to close are asking us to "sell" them some of our land so that their septic system isn't on our property. If they stand their ground and insist that the bank pay for the legal fees of a line adjustment and we can agree on a reasonable sum perhaps we'll gain something from it by doing so. The "loss" of some land to them by such an adjustment would be immaterial to the value of our property as it's in an unused corner of our property. Besides, who really wants a neighbor's septic tank on their property unless they can help it? How would we determine a fair asking price if indeed we are offered the option of a lot-line adjustment for the septic tank? Just fair market value of what .1 of an acre (or less) is at this time in our area?

    Thanks again for your input!

  6. #6
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    Default Re: Buyers Demand Lot-Line Adjustment or Will Not Close on Adjacent Bank-Owned Propre

    I think what you need to consider is that, due to the long existence of the garage and septic system, you can be taken to court and required to grant at least prescriptive easements for both, without any compensation at all.

    You need to get a local attorney to give you an analysis of this situation. Whether the bank wants to take you to court or sell the property as-is to someone else who will, the choice is up to you. The whole thing will be hanging around until settled, and I don't think any of the posters here so far thinks much of your chances of owning half of a garage or a septic system. It all comes down to whether suing you costs less than the gain in property value for an owner who wins. Winners in prescriptive easement and adverse possession cases win absolutely; they pay no damages or legal fees to the loser.

    Once you are taken to court, the negotiations are over if the other side isn't interested.

  7. #7
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    Default Re: Buyers Demand Lot-Line Adjustment or Will Not Close on Adjacent Bank-Owned Propre

    If somebody purchased a bank owned property "as is" and then tried to claim adverse possession, or a similar right based upon a period of adverse use, I would explore the possibility of arguing that the statutory period started over with their purchase from the bank. That is, whatever claim or adverse use the former owner made, the property had since passed to the bank which made no such adverse use or claim and thus the person buying from the bank cannot use "tacking" for the period of the prior adverse use. The analysis is going to be state specific and will likely turn on case law (some likely old) and any statutory codification of the elements of adverse possession and privity of estate; it could go either way.

  8. #8
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    Default Re: Buyers Demand Lot-Line Adjustment or Will Not Close on Adjacent Bank-Owned Propre

    You are probably correct that the bank would first try to just get the asset off their books by selling "as is", but that does not nullify the problem. It would be an issue that katfish and her husband would need to deal with the new owner about.

    As I recall, WA allows tacking (I recognize that you were not saying they didn't). If the encroaching use had been something like an access route which consisted of a dirt farm road, and the interruption in use was significant (whatever the court might consider that to be), I can see a court entertaining that argument and possibly accepting it. Even at that, if the route were used by potential buyers to view the property, and without an attempted barring of the use by the servient estate, the court might not see it as a significant interruption in use. For something which is a constructed appurtenance like a garage and/or septic system, I very much doubt that a court would even consider the argument of interrupted use unless those constructed apprtenances had been allowed to fall into serious disrepair and thereby indicate abandonment.

    Add to that the previous and continued belief that the true line was about 5' off the garage, and AP probably is not the theory which should be the primary focus, but rather acquiesence to a practical location of the line and long time (12 years at least) recognition of that practical location of the line.

    An encroaching use like an access route, utility location, or septic field would be more likely to be recognized as a prescriptive easement use, as it would not necessarily preclude the written title owner from reasonable compatible use. But a long existent permanent surface structure, especially one predating the disputed line is unlikely to support anything less than a recognition of fee title to the land under it. IMO, a court would view a prescriptive easement for such a thing as unrealistic as it would represent a likely permanent burden which would preclude the written title owner from ever using the land covered by the structure in any way as there are no reasonable compatible uses.

    I would also be surprised, in light of the previously believed location of the line, that a court would order "reasonable compensation" to the written title holder. Such a ruling would amount to a court ordered transfer of title by forced private sale. That is not the purpose or underlying principle of AP and is not within the court's authority. In any boundary dispute, the court's authority is to recognize title rights where they exist. They will recognize the fee title either at the line as defined by a strict adherence to the terms and dimensions recited in the record documents, or they will recognize it as defined by the extrinsic evidence of actions of the parties as indicated by their use of the properties over several years. If all of the uses by the landowners are not contained within the fee title lines recognized by the court, the court will examine the validity of prescriptive use rights and may recognize that one or more valid easements exist as defined by that/those uses.

    If the court recognizes an existing right or existing ownership which is contrary to the understanding of the party finding itself on the short end of the deal, the court has no authority to order the prevailing party to compansate the losing party for a right that the prevailing party already had prior to the court action.

    There may be rulings out there in which the court declined to order the abatement of a use which did not fulfill the elements of a valid prescriptive right but nonetheless would have created an inequittable situation if the use had been ordered to cease, and where the ruling gave the adverse user the option of ceasing the use or paying just compensation to the record title owner. If you have examples, I would like to see them to understand the nuances of the special circumstances of the case. I have reviewed many, many cases of disputed boundaries, many of which a party gained title by AP, and none in which a court has ordered compensation for the value of the disputed land by the prevailing party to the losing party.

    Katfish,

    If the "loss" of the land in question makes no difference to the overall value of your property, the bank will probably be reluctant to pay any compensation, but a per square foot price based upon the overall value of the properties is probably a good target to shoot for in negotiations and probably would still represent a reasonable cost of resolving the problem to the bank. If the direct costs and time spent to resolve the problem is less than the difference in value of selling their property "as is" vs with clear title, they will do it to make the pending sale happen. If the cost is greater than the difference in the price they can get for the property with clear title vs the property with this cloud, they'll pass.

    The advantage is that they have a potential buyer now. I don't know what the real estate market is like in your area, but in mine, and most other parts of the country, it is practically dead. There are costs to the bank in keeping the property on their books should the current sale fall through. So while they are likely not so desparate that they will shell out large sums of cash to make the LLA happen in order to close the current sale, they do have an incentive to get it taken care of in order to get a non-productive asset off their books.

    Get a local attorney whose practice includes real estate matters. That attorney should have appraisers familiar with the local market among his or her contacts. Go from there.

    I hope it works out well for you.

  9. #9
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    Default Re: Buyers Demand Lot-Line Adjustment or Will Not Close on Adjacent Bank-Owned Proper

    Besides, who really wants a neighbor's septic tank on their property unless they can help it? How would we determine a fair asking price if indeed we are offered the option of a lot-line adjustment for the septic tank? Just fair market value of what .1 of an acre (or less) is at this time in our area?
    Of course this is the question in a nutshell. The OP has read the posts here and laid out a settlement approach, just looking for what to expect by signing off on 0.1 acres. Now that we have a better grasp of the scope of the problem, a solution can be looked for.

    As the OP says, who wants an unwanted septic system on their property? What is the liability? How will it affect the opinion of a potential purchaser of his own property?

    The problem of an unresolved set of potential claims now clouds the title of the OP. Let's assume just for a talking point that the land involved here would appraise at $10,000 per acre, clear of title problems. Let's move that down to the 0.1 acres mentioned by the OP. Now we are down to a value of $1,000. But the land in question may have claims ranging from adverse possession, prescriptive easement, equity (the "waste" mentioned), acquiescence, etc. And the surveyor may come back any day and provide a surprise. Not a completely clear title situation at all. It's going to reduce the $1,000 further. How much further? If this goes to court for resolution, I'm guessing that all of the previously mentioned theories will be brought up but only one remedy will be asked: lot line adjustment. No one is going to go to the trouble to sue to get what amounts to a temporary license to use a septic system.

    The court will not need to look to AP or prescriptive easement theories, but only to equity based on wastage and unjust enrichment. An ordered lot line adjustment might turn out to be in a place not expected or wanted by the OP.

    Who knows. What I do know is that if the refusal of the OP to agree to a solution make the property unusable as to occupation, the bank or whoever ends up as the owner is going to look at it as an investment, and the decision to go to court will be based solely on the cost benefit analysis of the increase in value versus the cost of litigation. I think that the OP knows that a defense will be costly and it has a significant chance of failure, with an unpredictable outcome.


    I'd urge the OP to resolve this soon before it gets beyond the negotiating stage. If the current sale falls through, the bank may just take a loss to a speculator. By law, they have to get rid of it. A speculator may be more than willing to play a tighter game of poker with you than the bank.

    The suggestion to get a local attorney on board has already been made by me and by others. At this point, the OP has the possibility to settle for a certain outcome.

  10. #10
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    Default Re: Buyers Demand Lot-Line Adjustment or Will Not Close on Adjacent Bank-Owned Proper

    It's possible to be proactive - while the bank remains the owner, to bring an action asking a court to declare the encroachments to constitute trespass and, although the court would be apt to let them remain in place as a matter of waste, such a finding would preclude any litigation by a new owner claiming ownership. If lis pendens is filed in the chain of title, even somebody otherwise willing to buy "as is" would look askance at the deal while the litigation remained pending, so the bank might be inclined to cooperate. I'm not endorsing one approach or another - just pointing out that there is more than one path to resolution, and that multiple strategies can come into play. I agree that there is an element of unpredictability in all litigation - if there weren't, there would be a lot less litigation.

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