Dealing with Encroachments

[Brendan Hayne]

Hoping to get some thoughts from the investor community.  I purchased a remote property with a cabin last year at auction in San Diego, California. It was very cheap but had some known issues.  My intention was, and still is, to resolve the issues and then sell it.  The first issue was just typical deferred maintenance and that is all taken care of.  The second issue was an access issue.  The property is remote and the bank said it didn't have any legal access.  They disclosed that the road to my property went through someone else's land.  The neighbor told them that it was hers and they took her word with no documentation. Prior to purchase, I did my research and it turned out the bank was just lazy and didn't do their research. The road actually is on my land by 15ft as shown in a county survey conducted years ago. Since buying the property I have also paid another surveyor to confirm the findings. Now the neighbor has placed a bunch of stuff on the road to block my access.

So my basic thought is:

1. I don't want to get into a fight with her by removing her things from my land.  Again, it just about the money for me.

2. I don't want to chase her into court. Too much money for attorneys cutting into my ROI.

3. Now that I have confirmed that it's on my land I can just sell it full market value with "legal" access and then just disclose that it has a difficult neighbor that wants to claim part of the land as her own.  The new owner will accept that and give her the fight she seems to want.

Any strategic thoughts or alternative strategies would be much appreciated.  Thanks

[Peter Walther]

A few assumptions.  First, since it was assumed the property you purchased did not have record access you paid the market price for a property with no legal way to get to it.  Second, that you received a title policy but that policy has an exception for a lack of access therefore the matter is not covered by the policy.  Third, that your surveyor is correct as to the road being on your property though I've dealt with many situations where two surveyors disagree as the location of an improvement.  With those assumptions why do you think you'll be able to find a buyer willing to take on this fight in return for a modest reduction in your ask which I also assume will be based on the value of the property with undisputed legal access?

If I were in your position I would retain counsel to file a declaratory judgment action and simultaneously ask the Court to order the neighbor to remove the debris form the disputed road and issue an injunction prohibiting her from blocking it until ownership has been decided. Then I would find a tenant to rent the place giving me a ROI until the matter is decided. Based on my experience it will take awhile to get a final decision.