Q: I’m a real estate agent. My client bought a property. The title to the property was clear at settlement. After closing, the seller told my client that he had an “agreement” with the neighbor of my client’s property for a 3-foot easement onto the neighbor’s property for the driveway.

There is nothing in writing about this agreement, and now this neighbor wants $7,000 per year for the easement.

My client purchased the property from the bank, as the previous owner lost it to foreclosure. The driveway and fence have been there for 12 years. Is my client obligated to pay the neighbor? My client feels like he is a victim of extortion. Doesn’t the previous “agreement” with the old owner become null and void, since the prior owner lost the property to the bank?

A: This is an interesting question that has many potential answers. Your client bought a property and three feet of his driveway and his fence are located on the neighbor’s property. Now the neighbor sees a new person buy the home and suddenly claims that the right to use those three feet carries a $7,000 price tag and there is no document to back up the agreement with the former owner.

Your client has a mixed bag, and he isn’t going to like all of the answers.

First, you need to see what was disclosed on the title to your client’s property and even on the title to the neighbor’s property. It’s possible an easement was recorded for the strip of land and now that easement only shows up on the neighbor’s property.

If you find a document recorded against the neighbor’s property, that document might spell out if any money is owed by your client.

If neither property’s title discloses a recorded easement for the strip of land, the right to use the strip of land might have been a license agreement or an easement agreement granted by a prior owner. In some cases, it might not have been either but a mistake in placement of the driveway and fence by your client’s prior owner.

In some states, buyers of homes don’t request and don’t obtain surveys when they close on their purchase. They don’t even get a survey when they make improvements to their homes. For purposes of your question, it’s possible that the driveway was placed in the only place possible by the developer of the home, was placed incorrectly by a prior owner without the consent of the neighbor, or was placed in its location with the verbal or written consent of the owner of the neighboring property at the time.

A license to use land is generally revocable and can be canceled by either party at any time. An easement is generally recorded against a piece of land and can’t be terminated unless there is a mutual understanding by the parties or the terms of the easement allow for such termination.

If we assume that any written document was lost and neither current owner has anything in writing and title to either property doesn’t show any document pertaining to the driveway and fence, then we have to consider other potential solutions.

If the driveway and fence were placed in their current location in error, but the neighbor saw that the driveway and fence were built in the wrong place and never objected, your client may be able to claim that the neighbor has no right to object to the use of the driveway and the location of the fence and your client might not owe the neighbor anything. Your client may be able to successfully argue that the neighbor should have demanded that the work stop when he observed the construction on his side of the property line.

It would not be fair to your client if the neighbor knew of the mistake when the work was being done and said nothing.

If following that error, the neighbor then gave permission for the use of the driveway and the location of the fence where they were located with the express or implied understanding that they would have to be removed in the future, the neighbor could demand that your client remove the fence and driveway.

In this case, the right to use the driveway and the location of the fence would have been given under an unwritten license agreement that could be revoked in the future. If it turns out that this is the situation, your client might have to move the fence and cut off part of the driveway. In some situations, that is not hard. But if the three feet of land are essential for the driveway it could be impossible.

In urban areas, a lot might have only five feet or so between the home and the edge of the property line. If a driveway is built next to the home, the driveway would need to be at least eight feet wide. Cutting three feet off of that driveway would make passage of most cars impossible.

In rural areas, if the area between the home and the edge of the property line is dozens of feet away, the change might be minimal. If the driveway isn’t long, the cost of moving the fence and adding asphalt to the other side of the driveway may not be significant and could be less than what the neighbor is asking for as a yearly fee.

One last option: In some states your client may be able to claim that he, through his prior owners, has obtained the right to continue to use the driveway and the strip of land. In some states you must have used the land against the interest of the actual owner for up to 21 years. While in other states, seven years might be sufficient to claim the right.

You and your client need to gather facts to determine how to proceed and seek the help of a real estate attorney, if necessary.

The other part of your question was whether the sale from the bank to your client terminated the prior owner’s agreement with the neighbor. That agreement would still exist if it was an easement that continues to run with the land with the land without regard to who actually owns the property.

But if the agreement was a license agreement that could terminate, then the duty to pay the fee could have ended when the property was sold along, with your client’s right to continue to use the strip of land.

April 3, 2009