Texans are famous for their intensity in property rights, especially real estate property rights. Some Texans might even say that a person’s right to own and control a piece of land is that person’s most vital legal right as an American citizen. Now, whether that is true or not is a question I’ll leave up to you, but I think the level of Texans’ concern about property rights is reflected in the broad jurisprudence that has developed around real estate boundary issues in Texas. Below is a fact situation discussing some real estate property issues, laws and resolutions.
Ted is a landowner in West Texas and Barney is his adjacent landowner. Ted and Barney have been neighbors for one year. Barney decides to erect a shed on his property to store his farming tools and Ted believes the shed was built on his property. There is a fence on the property and the shed is built on Barney’s side of the fence. Ted argues the fence line is not accurate and Ted believes the shed is on his property. Barney disagrees and Barney refuses to remove the shed.
Ted is exhausted from the continuous arguments with Barney and decides to sell his property and move back to Ohio. The buyer on Ted’s property, Robin, needs a new survey completed on the property to satisfy the requirement of her lender, Goliath Bank. A survey is completed, and the survey shows that the fence line is, in fact, not accurate and that Barney’s toolshed is located partially on Ted’s property. This is a problem for Robin because the lender is now refusing to complete Robin’s loan until this “boundary and encroachment issue” is resolved. Ted, Barney and Robin now have to figure out how to resolve these issues so Robin can close her loan.
Whether or not the fence line determines the property line or the survey?
Whether the lender can create a lien on the subject property while Barney’s shed is encroaching upon it?
- Under Texas law, the fence line may not legally define the landowner property line. The primary purpose of a boundary line dispute is to locate the survey as it was traced on the ground by the original surveyor. Moore v. Campbell, 254 S.W.2d 1018, 1024 (Tex. Civ. App. – Austin 1953, writ ref’d. n.r.e.). The location of a tract’s boundaries must be determined based on the documents that created the landowner’s interest in the land (e.g., a deed) and any circumstances surrounding that document. See Stafford v. King, 30 Tex 257 (1867); City of Webster v. City of Houston, 855 S.W.2d 176, 178-179 (Tex. App. – Houston [14th Dist.] 1993, writ denied). Accordingly, the survey (which is based on the deeds and prior surveys related to Ted’s tracts) will be legally binding, not the fence, unless there has been some kind of agreement to the contrary between Ted and Barney and the survey shows that the shed is on Ted’s property.
- Despite the survey boundaries, Ted and Barney could have modified the survey boundary line either by: (i) Oral Agreement, (ii) Acquiescence or (iii) Written Agreement.
Oral Agreement. Texas law holds that when there is uncertainty, doubt or dispute as to the location of a boundary, it may be fixed by oral agreement, mutually binding upon the adjoining landowners, even though they may have been mistaken as to the true location of the line. The existence of uncertainty, doubt or dispute is essential to the validity of the agreement. Gulf Oil Corp. v Marathon Oil Co., 152 S.W. 2d at 714. See also McAllister v. Samuels, 857 S.W.2d 768 (Tex. App. – Houston [14th Dist.] 1993, no writ), and Thompson v. Jamison, 699 S.W.2d 687 (Tex. App. – Texarkana 1985, no writ). Ted and Barney never agreed to a boundary line orally and an updated survey ultimately prevails and shows that the boundary line is not the fence.
Acquiescence. A boundary line may be established by recognition and acquiescence by all interested parties for a sufficient length of time. This period is not precise but is in excess of the time required by the statute of limitations for the acquisition of property by adverse possession, typically ten years. Yates v. Hogstrom, 444 S.W.2d 851 (Tex. Civ. App. – Houston [14th Dist.] 1969, no writ). To establish a boundary by acquiescence, there must uncertainty, doubt or dispute as to the location of the boundary, are not invalidated by the general conveying statute found in TEX. PROP. CODE ANN. § 5.021 (Vernon 1984). Since Barney has only owned the adjacent property for one year, Barney will not meet the statute of limitations for acquiescence of the property. Typically, the statute of limitations requires ten or more years of adverse possession.
Written Agreement. Finally, written boundary line agreements are the strongest argument for the correct and undisputed location of the boundary line. Gulf Oil Corp. v. Marathon Oil Co., 152 S.W.2d at 721. A written boundary line agreement between Ted and Barney would have resolved this dispute as to the property line directly.
- An encroachment agreement helps resolve the issue of the shed encroachment since a landowner may lawfully use his or her land, as long as such use does not infringe on the legal rights of the adjoining landowner, Gulf, C. & S. F. R. Co. v. Oakes 58 S.W.999, 1000-1001 (Tex. 1900); Comanche Duke Oil Co. v. Texas Pac. Coal & Oil Co. 298 S.W. 554, 560 (Tex. Comm. App. 1927); Texas & N.O.R.G. Co. v. Davis 60 S.W.2d 505, 507-508 (Tex. Civ. App. Beaumont, 1933, no writ). The encroachment of the shed on Ted’s property may be mitigated for the purpose of Goliath Bank’s loan via an “encroachment agreement” between Barney and Robin/Ted prior to Robin’s closing. An encroachment agreement will simultaneously (i) clarify that the land on which Barney’s toolshed is located belongs to Ted/Robin’s tract and (ii) permit Barney’s toolshed to remain where it is located. Robin’s Lender will likely want to review this encroachment agreement to make sure their interests are secure in the event of a foreclosure or resale of Ted/Robin’s tract. Once any issues identified by the Lender in the encroachment agreement are addressed by Ted, Robin, and Barney, the boundary issue is generally resolved, and the transaction can proceed.
Resolutions and Conclusions:
The laws of Texas regarding real estate property rights, boundary line disputes and encroachment issues are unique but shouldn’t be that much different from other state laws. This article presented the most common ways to resolve a boundary line dispute and move a transaction forward, but the takeaway is that the best way to achieve such resolution is to have the adjacent property owners sign a written agreement between them that (i) identifies the boundary line they want to establish and encroachment they want to contain; and (ii) runs with the land and binds all future owners, successors, and heirs to the relevant tracts.
Typically, boundary issues arising from sheds, fences and shrubs (removable items) can be cured very easily, and lenders/investors generally won’t raise too much of an issue about them. With that said, it is preferable that the landowners agree to a written encroachment/boundary line agreement, so the issue is directly addressed for all the parties and all future owners of the property.