An encroachment agreement is a legally binding real estate document signed by neighboring property owners when a property encroachment is found to exist. It states the agreed-upon resolution to the encroachment, which becomes binding between the two properties.
Encroachment agreements became more popular toward the end of the 1900s as real estate surveys performed prior to property sales often showed property owners encroaching on neighboring properties . The encroachment can be a fence, wall or other structure added on to one property that extends onto the legal property of another.
The purpose of an encroachment agreement is to legally state the resolution between neighboring property owners upon discovery of an encroachment. The agreement becomes part of the legal property of both owners and helps offset title issues when either party wants to sell.
If the owner whose structure encroaches agrees to remove the structure, no agreement is needed. If the encroached-upon property owner is not burdened by the encroachment, he might cooperate with the other owner and allow the encroachment to remain. Along with this acceptance, the agreement notes other important protections for both parties.