Selling a property with a boundary dispute
A boundary dispute is a legal problem attached to a property, and buyers discount it heavily because it has no predictable end.
Boundary and neighbour disputes are among the most difficult problems to sell past, because the buyer is acquiring a dispute as well as a property and the outcome is uncertain. Lenders are also cautious, because a dispute can affect the title and the property's enjoyment.
The property information form asks directly about disputes with neighbours, so a dispute cannot be concealed. The question is how to resolve or price it.
What counts as a dispute
The definition is wider than most owners assume, and a matter they consider trivial may be one they must disclose.
- Any disagreement about the position of a boundary or the ownership of land
- Disagreements about rights of way, access or shared maintenance
- Complaints about noise, nuisance or overhanging vegetation that have been raised formally
- Correspondence with a neighbour's solicitor, which is itself evidence of a dispute
- Any matter that has been reported to the council or to a professional body
Resolving it before marketing
Resolution is almost always better than disclosure and a discount, because the discount a buyer will apply for an unresolved dispute is larger than the cost of resolving it.
- Establish the legal position from the title plan and the deeds, which may settle the question without negotiation
- Consider mediation, which is far cheaper and faster than litigation and often resolves boundary matters
- Where the position is clear, a solicitor's letter asserting the boundary may be sufficient
- A boundary agreement or a determined boundary application can formalise the position permanently
- Where the dispute is genuinely intractable, obtain advice on how it should be priced and disclosed
If it cannot be resolved
Where a dispute cannot be resolved before you need to sell, disclose it fully and price it. Provide the correspondence, the title plan and any legal advice you have obtained, because a buyer who can see the whole position can assess the risk.
The buyer pool narrows to those willing to take on a dispute, which usually means investors and experienced buyers. Expect a significant discount, and expect the sale to take longer than a comparable property without the issue.
Common questions
- Do I have to tell buyers about a boundary dispute?
- Yes. The property information form asks directly about disputes with neighbours, and answering falsely gives the buyer a remedy after completion. Even a matter you consider settled may need disclosure if there has been formal correspondence. Take advice if you are unsure where the line is.
- How much does a boundary dispute reduce a property's value?
- It varies, but the discount is often substantial because the outcome is uncertain and lenders are cautious. Resolving the dispute before marketing is usually worth more than the cost of resolution, because the discount a buyer applies for an unresolved dispute exceeds the cost of dealing with it.