Owners Need to Be Vigilant to Protect Property Rights
When David Shane bought his home on Cody Road in Sherman Oaks, he planned to make some changes on a part of the property that had been fenced off years ago and occupied by the neighbors downhill. He didn’t think there would be a problem since the property fenced off by the neighbors was actually his on paper.
The downhill neighbors eventually prevailed, however. Because about 2,000 square feet of Shane’s property had been fenced in more than five years earlier, the neighbors successfully argued in court that they had acquired a prescriptive easement. The downhill neighbors didn’t just get the easement, they got a settlement for about $300,000 in damages for emotional distress and interference with their easement. And while the downhill neighbors get to keep part of Shane’s property for their own use, Shane is still obligated to pay property taxes on the parcel occupied by his neighbors.
If there’s a moral to this story, it’s that property owners who “sleep” on their rights may find that their property rights are gone as a result of neighbors claiming a prescriptive easement, adverse possession or some other interest that eats into a property owner’s rights.
“There are probably encroachments going on in most of the hillside areas in the Valley,” said Penny Salomon, a litigation partner at the law firm Reznik & Reznik in Sherman Oaks. Developers in the 1950s cut into the hillsides with a series of slopes and terraces. The property lines were usually divided mid-slope, but many fences have since gone up right at the slope lines, causing either the up-slope or down-slope property owners to encroach on their neighbor’s property. That’s how the dispute between Shane and his neighbors came about.
Salomon represented Shane’s neighbors and she convinced a court that her clients had a prescriptive easement for landscaping purposes. To acquire a prescriptive easement the use must be open and without the owner’s permission, plus be continuous and uninterrupted for five years.
Adverse possession works in much the same way as a prescriptive easement. Adverse possession, however, requires that the adverse possessor pay property taxes on the adversely possessed property for the five-year period. If the adverse possessor can show five years of tax receipts and the other elements needed for a prescriptive easement, the adverse party then acquires the property.
Salomon estimates that the fight over 2,000 square feet in Sherman Oaks ended up costing all the parties about $750,000 in legal fees. “It was a pretty nasty case,” she conceded.
“You can have some real bitter fights between neighbors over 12 inches,” observed Laurie Collins, associate counsel at First American Title Co. of Los Angeles. Her company insured David Shane under one of their older, more-comprehensive title policies. “That case cost us a lot of money,” she said. “But today we would have denied his claim.”
Title insurance generally protects residential property owners against claims on their property that are based on some sort of recorded instrument--like a recorded deed or easement or a real covenant/equitable servitude (which is basically a promise to do or not to do something on the land). Most title insurance will not help a property owner who has a neighbor, for example, that’s encroaching with a fence or driveway. Those type of encroachments are, for the most part, not recorded, and only homeowners with extended coverage will be covered. This type of extended coverage costs more and it requires an inspection or survey of the property, Collins explained.
Most property owners don’t need to get extended title policy coverage, though, said Michael M. Silver, real estate partner at the Encino law firm Grayson, Givner, Booke, Silver & Wolfe. A survey may be advisable if the property in question is an odd-shaped or older lot or if the new buyer has plans to build on the property. Most other property owners and buyers should just keep an eye out for fences or walls or shrubbery that seem to extend beyond the property line nails driven into the concrete curbs in front of most homes.
If you’re the encroacher and you get a letter from your neighbor, Silver said, sometimes the best thing to do is ignore the letter and hope that your neighbor won’t spend the thousands of dollars needed to fight the issue.
Not all neighbors give up so easily, however.
Bruce M. Lorman, an attorney who worked with First American on David Shane’s case, is preparing his defense for an upcoming trial over 45 square feet that are being contested by two neighbors. The not-so-neighborly neighbors are each laying claim to a thin sliver of land where one of the neighbors recently erected a new fence. The husband and wife who launched the lawsuit are both attorneys, Lorman said, so perhaps it’s no wonder that these 45 square feet have become a battleground.
“People buying a house should not assume that fences and walls that are now standing are really boundary lines,” advised Lorman, a real estate litigator and counsel at Herzog & Fisher in Marina del Rey. If there’s a question about who owns what, he said, deal with it quickly--before the five-year statutory period for a prescriptive easement or adverse possession passes.
If a neighbor is encroaching on your property, don’t just sit back and let it happen, Lorman said. Either fight the encroachment or record a permissive use agreement that will stymie the neighbor from ever being able to claim an adverse interest.
Finally, sellers who have reason to believe a neighbor is encroaching had better disclose that fact to potential buyers. Failure to disclose can result in an expensive and messy lawsuit.
