HELP!! Issue with SURVEY during refinance of rental property!?!?

Question

BP Nation,

Really could use your help to solve this problem. So I received a loan approval to obtain a cash our refi on one of my rental properties. When I bought the property I did not perform a survey since I bought the property cash (I know my mistake). There is an issue with the adjacent lot of land (4 feet in width) which was supposed to be conveyed to the house next door. Apparently the last three times the deed had changed hands this was never recorded. My property has a fence which is on the 4 foot piece of land and the tenant's have a dog they let loose in the backyard.

The lot of land belongs to someone that owned the land in 1990, I believe the original owner/county appraiser forgot to convey the strip of land to the neighbor next door. So the title company tried to send a letter to the original owner of the small piece of land to no avail. They asked if I knew the owner which I do not since I purchased the property in 2012. The attorney at the title company said if they cannot find the owner of record to sign a quit claim deed, he said the next option would be to file an adverse possession suit and quiet title action.

Apparently an adverse possession suit is, at its core, a lawsuit. The timeline depends on court docket, responsiveness of adverse parties and the usual vagaries of litigation scheduling. I am hearing best case scenario would be 3-6 months, but could certainly run out longer than that. Does anyone have any advice for this particular situation? Should I just move my fence back off the 4 foot piece of land. Please advise!!! Time is of the essence. I was planning to use these funds to complete a rehab of another property I purchase two months ago.

Thanks in advance!

Wayne Brooks · Answer

Rick H. Yeh, if the property was never transferred, the fence Is in the right place.

Anil Samuel · Answer

Rick H. How long has the process taken for you so far?

Anil Samuel · Answer

@Josh Compton The 4' piece of land causes an issue with the survey/title of the property. This means the settlement company will not close the loan until the survey of the property is addressed. You lucked out. Next time I will definitely get a survey for a SFR. @Wayne Brooks I believe it is a platted subdivision. I don't believe the 4' piece of land was plated by itself it was attached to the original lot 14. I think the property appraiser's office or the deed office messed up something.

Wayne Brooks · Answer

Was the 4' a separately plated piece, on it's own? Is this in a platted subdivision? I assume it is since you're talking lot numbers. Usually, any piece would have to be subdivided properly before it could be sold, or excluded from a transfer.

Josh C. · Answer

10k to litigate??? Insane. If it's only and fence give it to your neighbor and be done with it, then the dog will be pooping in his yard. Does that 4' affect the value of appraisal for refi 10k? Opps just read the driveway part. I just did a cash out refi and they didn't do a survey and I never did when I bought either. Good lesson.

Josh C. · Answer

10k to litigate??? Insane. If it's only and fence give it to your neighbor and be done with it, then the dog will be pooping in his yard. Does that 4' affect the value of appraisal for refi 10k?

Anil Samuel · Answer

@Jason Crain I thought only my fence was on the neighboring lot, but unfortunately according to the surveyor my driveway is also on the 4 foot plot of land.@Wayne Brooks Originally I was trying to refinance the property so the bank ordered a survey after I was approved for the loan. The property that my fence and driveway are currently located on is owned by a man who that lived on lot 14 which is adjacent to my lot, 15. When the owner of lot 14 sold his property he excluded the 4 foot piece of property on his deed. I got this info from the county office. Today he holds the deed for the 4 foot piece of land which is currently assessed at $100. So you are correct the 4' is still not part of my deed. I have spoken to my RE attorney who said it will take approximately $10k to litigate. I would like to purchase the 4' piece property if possible and complete the refi. Not sure how to do this when the owner doesnt respond, threaten with a lawsuit???@Rick Harmon The property is located in Florida. I did not have to get a survey in 2012 when I purchased the property since I did not have a mortgage. I know big mistake...lesson learned.

Rick H. · Answer

Geez, @Wayne Brooks I can't agree with you more. Do lenders require title companies to get physical surveys in Maryland? I would hope not, for a parcel with an SFR.If my fence is on the wrong place by a few feet and it does not affect my ingress or egress or access (such as a side yard) why do I care? If my neighbor is not affected, why does he care?Which leads me to ask, as you have, what created the catalyst for a prospective lender that they care? To even know?

Wayne Brooks · Answer

Something is not clear: You said "the property was supposed to be transferred to the neighboring property" this means it was never transferred from Your parcel to the one next door. So, what instrument/document is causing this issue? Is the 4' not still part of your property? If so, adverse possession and QT are not relevant? What has triggered this issue?

Jason C. · Answer

I would move the fence, that has to be cheaper than a title suit.