What is an Encroachment Agreement?
An encroachment agreement is a written agreement between neighbours, wherein one neighbour acquiesces to the encroachment of the adjoining neighbour onto their property. For example, if the sides of two properties are not perfectly straight, a neighbour may build his or her fence one foot onto their neighbours’ side of the fence in order for the fence to follow the property line.
The encroaching neighbour may want to ensure that the encroachment is lawful, and that both parties have formally consented to living beside each other with an irregular property line. The encroaching neighbour , or the landowner benefitting from an encroaching structure, would therefore enter into an encroachment agreement with the neighbouring landowner to ensure that: (a) the encroachment onto their lands is permitted; and (b) neither party holds the other liable for the encroachment.
When entering into an encroachment agreement, neighbours may want to consider some of the following points before formalizing the relationship:
Sample encroachment situations include:
These are just a few examples. In almost all cases, an encroachment agreement is required to protect your interests in the event of damage to the encroaching structure.
The Importance of Encroachment Agreements
An encroachment agreement between neighbours provides the opportunity to recognize that the status quo can be properly protected, and sets out a framework by which such agreement can occur. It is in the interests of each owner to consider this option to avoid costly future litigation.
Where a neighbour is encroaching on your land, seeking an encroachment agreement can be more productive than seeking a demolition order or sue for damages. The remedy sought must be proportionate to any harm suffered. There is a fundamental difference between where an encroachment affects a lot line fence, or where an encroachment involves a building. In the first example the cost saving is easily determined in terms of replacing a fence. In the latter example, the cost of demolishing the encroachment can be exceedingly high when weighed against the assessed impact.
Applying these principles, the specifics of encroachment agreements can vary depending on the particulars of each matter, but can include: (i) the provision of easements; (ii) making payments in lieu of damages; (iii) modifying the right of encroachment; (iv) including a clause to remedy loss (i.e. covenants to comply with municipal by-laws); (v) the right of exclusion; (vi) and timing of termination.
Legal Requirements and Framework
When neighbours wish to erect a structure that encroaches beyond their property line, or a fence that exceeds the permissible height, an encroachment agreement will become necessary. An encroachment agreement is a written agreement between the owners of neighbouring real property, which outlines the owner’s rights to encroach upon the adjoining land.
Encroachment agreements can potentially take on a number of forms. The most important provisions for these agreements are the parties’ names, a legal description of the properties to which the encroachment relates, and the precise nature of the encroachment itself. The terms of the encroachment agreement must be clear and unambiguous as to each party’s rights with respect to the encroachment.
Many municipalities have standard form agreements that can be entered into by the neighbouring owners, evidencing their consent to the encroachment. If the agreement is a simple one, such as granting permission to construct an addition that has a small overhang or footing extending over the property line, or to plant roots at the edge of the property, a pro forma agreement will frequently suffice.
If the encroachment is substantial in nature, such as building a garage that straddles over each neighbour’s property, a random pro forma document may not suffice because many municipalities will not issue a building permit for the construction of the encroaching structure until the owner has obtained her neighbour’s consent.
Some municipalities may require not only that the owners sign the encroachment agreement, but also that it be registered on title outside of the normal course, for example by including it as a schedule in the vendor’s title search for the property to be acquired, so as to provide actual notice to third parties. A municipal register may also have provisions permitting its application to register an encroachment agreement.
Encroachment agreements can be drafted ‘properly’ such that they include language that gives the neighbouring landowner, or other interested parties, specific rights-of-entry to the encroaching property to inspect the encroachment. This may be particularly useful if a neighbour wants to have the right to take action to ensure that the encroaching property is not causing any future damage to her own. For example, if a neighbour’s root structure is encroaching on the shared property line, the encroached owner may want to have a reciprocal right-of-entry to disclose the extent of the encroachment and ensure its mitigation.
The courts have established that, in principle, ostensible permission from the owner of encroached property can give rise to a right-of-way to mitigate damage to the encroaching property, for example from the roots of their tree, which may be damaging the neighbouring property. The courts will often look to the intentions of the neighbouring owners in deciding whether the encroachment is adverse or adverse. If the original intention was to convey the property with the encroachment, then the court may grant relief. However, if the neighbouring owners intended simply to allow the encroachment to occur and then have it removed, then the court may not grant relief.
In conclusion, an encroachment agreement in form is subject to the usual rules of construction of all such written instruments, and in particular it must be in compliance with the municipal building by-law. Encroachment agreements and neighbouring landowners usually give express notice to the purchaser at a land title registration, and this requirement eliminates the necessity of order 69 of the Land Titles Act. Typically, an encroachment agreement will clearly reflect each party’s agreement with respect to their respective rights of entry to the shared property to ensure the mitigation of a threat of damage to their buildings, such as by a tree root. The encroachment agreement will also clearly outline any additional requirements that either of the parties may have that are specific to the circumstances of the situation.
Steps to Creating an Encroachment Agreement
A step-by-step process for creating an encroachment agreement follows:
Step One – Negotiation. Approach the neighbour seeking to encroach on the other neighbour’s property and advise them that you will be seeking compensation for this encroachment. Give the neighbour a chance to remedy the situation.
Step Two – Identifying the Terms. Once agreement is reached as to the terms, it is important to document the agreement between the parties.
Step Three – Drafting the Agreement. Blanket provisions are not appropriate for encroachment agreements. Clauses should be included in the encroachment agreement which relate specifically to the encroachment. For example, as noted above, the City of Toronto encroachment agreement contemplates encroachments in the City’s Right of Way. Umbrella provisions do not follow the same rules and should not be applied to encroachments on private property. An encroachment agreement often takes the form of a license agreement.
Key provisions that should be covered in an encroachment agreement are:
Step Four – Signatures. All parties need to execute the encroachment agreement in order for it to be binding on each party.
Step Five – Refining the Agreement. The agreement should be registered on title at the local land registry office if the encroachment is on private property.
Common encroachment agreements include:
Encroachments could be anything from tree roots seeping into the neighbour’s yard to fences, patios, driveways or any other article that represents an invasion on someone’s property.
On occasion, encroachment agreements can be very difficult to settle as neighbours refuse to cooperate and reach an amicable agreement. These are often the ones that end up in costly litigation and become unresolved.
How to Solve Disputes Without Litigation
While legally sound encroachment agreements are essential, it is equally important for neighbours to maintain a positive and constructive relationship with each other to the extent possible. The majority of neighbourly disputes can be resolved outside of the courtroom and with minimal impact on property value. When disputes arise it is always recommended that owners try to resolve the issues amicably so that the property value is not reduced by an ongoing dispute and a new survey or additional legal fees are not required to resolve the issue.
Disputes over encroachment are similar to any other type of boundary dispute between neighbours. The focus should always be on resolving the issue at hand in an amicable manner. There are several available options to try to resolve the dispute in a productive manner. Mediation is the most common, and one of the most cost effective, methods available to parties involved in a dispute. Mediation is a non-binding process where a third party tries to bring the parties together to discuss the dispute and proposes a compromise agreement that is acceptable to all parties. If successful , an agreement is prepared in writing and signed by the parties. If not, the parties are free to proceed with litigation. The success of mediation, like most forms of alternative dispute resolution, is dependent on the open mindedness of the parties and their willingness to accept the compromises proposed by the mediator.
A dispute resolution board is another example of alternative dispute resolution. This is a somewhat more formal process where an independent arbitrator is appointed to render a ruling to resolve the dispute. Arbitration can be expensive, however, the arbitrator’s decision is binding on the parties to return to court to have the dispute resolved by the Judge. Regardless of the method of resolution, there is an array of options that will allow the parties to come to an agreement without having to start, or defend, a lawsuit. There is no downside to coming together to create a mutually beneficial agreement – particularly when one neighbour is encroaching on the other. A neighbour who provides written agreement to a neighbour’s use of a small portion of their land is the sensical solution that should be taken before a dispute arises.
Encroachment Case Examples
An example of a successful outcome was in a case where two neighbours discovered that the fence they had always used as the boundary line for their properties was actually over the property line and encroaching onto the neighbour’s land. The neighbour whose property the fence was on agreed to grant a "permission agreement" to the other neighbour to allow the fence to remain in its current position, which formalized the long use of the fence by both parties. This expectation that the fence would not be removed or altered produced certainty for the neighbours.
A challenging outcome occurred in the case of Young v. Barber, 2020 BCSC 982. Following a fire at Mr. Young’s property the fire department put out the fire by flooding the property, which caused water to flow into the neighbouring Mr. Barber’s property. Mr. Barber claimed he spent $10,000 to fix the issues caused by the flood and wanted damages and cost from the Youngs. The Youngs filed a counterclaim and registered a lien against Mr. Barber’s property against any amount that they paid to fix the part of the fence which runs along their property line. The Youngs were not entitled to any damages as a result of the damage to the fence as the application of the doctrine of "encroachment by permission" means that when neighbours have long established the use of land with the understanding and permission of both parties the claimant can only claim damages for damage caused to him but he cannot remove the encroachment.
Two years after the Big One earthquake Mr. and Mrs. Wong returned to their property to discover that it had shifted causing their basement floor to slope towards one corner of the house. They discovered that some of the structural concrete blocks had become loose in the ground and the property was now missing soil. Because of the "repair by consent" doctrine, the Wong’s were not able to recover the costs incurred for the remedial work because the repair was long-standing. The decision of Wong v. MacKenzie, 2006 BCSC 1328, was appealed and therefore the decision was considered in Wong v. MacKenzie, 2007 BCCA 579. At the appeal, the judge found that it was the Wongs’ inability to provide any evidence that the repair was not long-standing that resulted in the dismissal of their claim.
Long-term Advantages of Encroachment Agreements
There are also long-term benefits to having an encroachment agreement in place. For example, the presence of an encroachment agreement may increase the resale value of a property, which is especially beneficial to the Municipality as a whole. The fact that one owner has the right to a strip of land to do what he/she wants with it (within the constraints of the agreement), rather than the property being designated as public lands increases value to the owner of the parcel of land .
Furthermore, having a written encroachment agreement in place can prevent misunderstandings from arising down the road and can prevent future conflicts despite not being in and of itself the solution to all potential encroachments. Over time a written agreement between neighbours can foster a sense of community and goodwill, and serve as a means of preserving that relationship when one owner wishes to write to or call their neighbour regarding an issue.