One of the things which may seem bizarre about the Jersey conveyancing process is the apparent obsession with boundaries.
Conveyancers acting in property purchases go on site to make sure that no part of any building or other construction encroaches on any neighbour's land. Encroachment covers not only building on a neighbour's land but also building on the 16 ½ inch offset of a boundary structure or having a window or other opening less than 2 feet 9 inches from the boundary. Arguments about actual or alleged encroachments are one of the main things that can hold up completions.
So what, you may ask, if the roof overhangs the next door property by a couple of inches or one of the windows in the nice new extension is only 2 feet from the boundary; surely this couldn't put you at risk? The problem, though, is the traditional approach of Jersey law to encroachments, which has been that the party whose property has been encroached on is entitled to a court order requiring removal of the offending items. For technical reasons of Jersey property law the courts have up to now found themselves unable to award damages as an alternative to removal of the encroachment.
It is widely thought that when the issue next comes before the Royal Court a more pragmatic approach may be adopted. But for now conveyancers have to continue to proceed with caution, in the knowledge that the worst case scenario would be an order requiring removal of an encroachment. Of course, most property owners do not actively seek out and pursue encroachments by their neighbours but it only takes a falling-out between neighbours for any reason at all for the parties to look for any ammunition which can be used in the fight.
What then can be done by a purchaser if encroachments come to light in the conveyancing process? There are two principal solutions. The first is to secure the relevant neighbour's participation inthe contract of purchase in order to agree that the encroachments can remain in perpetuity. This amounts to a complete 'cure' of the problem, preventing the neighbour and the neighbour's successors in title from ever challenging the encroachment. On the whole, neighbours tend to be prepared to co-operate, especially if the encroachment in question is minor and all the more so if the neighbour is also a sinner as well as being sinned against in terms of encroachments or other title irregularities: in such a case, both parties come away with a rectified title. The norm is for participating neighbours to require their legal fees to be paid.
The other principal solution is defective title insurance. This involves an insurance company, in return for a one-off premium, providing a specified level of insurance cover in the event that the neighbour takes legal action in respect of the encroachment in question. The level of cover is dictated by the expected cost of removing the encroachment, which could of course involve partial demolition and rebuilding in certain cases. Although, as mentioned, a party whose property is encroached upon may ultimately be able to obtain a court order requiring removal, it is likely in many cases that they would accept a monetary settlement. If an encroachment claim is brought, the insurers will defend the claim on behalf of their insured and thus have the opportunity to seek to conclude a monetary settlement.
Not all encroachments are suitable for insurance. Clearly insurers will only be likely to take on risks where they perceive a low risk of a claim being made. A long-standing encroachment which has never been complained about by the neighbour would be a prime example of a risk which would be attractive to insurers. Encroachments which exist without challenge for forty years or more are, in fact, protected by the law of prescription (limitation) and the closer to this age an encroachment is the more attractive the risk generally is to insurers. It must be stressed, however, that insurers will never agree to provide cover where there have been communications with the neighbour in relation to the encroachment. If, therefore, a neighbour is asked to participate in the contract of purchase and declines to do so, insurance will not be an option.
Encroachments require careful consideration: what is the nature and extent of the encroachment; what is the ultimate downside; what is the most sensible course of action in the circumstances? An experienced conveyancer will be able to analyse the issues, negotiate with the other parties concerned and, most importantly, provide clear and helpful advice and guidance to the client.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.