If you’re a commercial building owner, you need to be aware of certain legal traps that can seriously reduce the market value of your property. Some of these traps contradict the age-old advice about being a good neighbor. Here are a few examples that make this point.
Be careful when trading favors. Let’s say you own a building that contains a retail business and is surrounded by other, similar buildings. Each building provides separate parking for its customers. After a rainy winter, the parking lot for your building, like all of the others, is in bad shape. The owner of the neighboring building operates a road paving business. He calls you and says he’ll be repaving his parking lot soon and would be happy to pave your lot, too. He mentions how his business has been booming recently and, frankly, he runs short of parking in his lot at times. He offers not to charge you to pave your lot if you let him direct his customers to your lot for overflow parking. Being a good neighbor, you agree.
Fast forward a few years. The retail business in your building is booming and, like your neighbor, often runs short of parking. You ask the neighbor to stop directing customers to your lot for overflow parking. The neighbor reminds you of the “deal,” says he never would have paved your lot for free if you hadn’t agreed to it and politely refuses your request.
What are your rights? In legalese: When you made the deal, you probably created a license that you cannot revoke. In English: You have a big problem.
Your neighbor probably has a long-term—and maybe permanent—right to use your parking lot as overflow parking. Worse, when you sell the building, you probably cannot avoid disclosing the agreement to the purchaser. What started as a “good deal” might dramatically reduce your property value.
How good is that fence? Remember the old adage that good fences make good neighbors? While it’s typically true, it won’t be if a surveyor discovers the fence is not on the actual property line. This happens more often than you might believe.
I had a case recently where a neighbor commissioned a survey that concluded a fence wasn’t on the true boundary and, consequently, a significant part of my client’s building was on the neighbor’s property. In the ensuing lawsuit, the neighbor claimed to own part of the building—and she had a good argument since an old deed seemed to clearly make her point. Though not all boundary line disputes end well, my case did. We won at trial. That case, and many like it, should teach some ounce-of-prevention, pound-of-cure caution to property owners.
As an ounce of prevention, never make an informal agreement with your neighbor about where to locate a fence. If your intention is to place a fence on a boundary that you cannot locate, hire a surveyor. If you ignore that advice and incorrectly place a fence based on a guess as to the common property line, you just set a trap that might snare you (or your successor) and result in the loss of part of your property.
In those instances when you can’t avoid a dispute, you’re stuck with a pound of cure. When faced with a neighbor contending he or she owns part of your building, don’t panic. Call a lawyer. Even if a deed shows your building is on your neighbor’s property—as was the situation in my case—deeds don’t end the dispute. You may be entitled to keep your entire building for reasons that are too esoteric to explore here.
Don’t let anyone block your access. Your building’s parking lot has direct access via the main roadway. Based on an easement granted in the deed, you also have the right to direct customers across a private road on your neighbor’s parcel to a secondary public road. Through the years, people periodically but rarely use the access easement across your neighbor’s parcel.
You eventually intend to redevelop your parcel and, when you do so, using the easement will be an integral part of the plan. One weekend, the neighbor constructs a huge, immovable planter box on his property that blocks all use of the easement. What do you do? The obvious answer is to request it be moved and, if the neighbor refuses, sue to enforce your easement rights. What’s not so obvious is the importance of quick action. Delaying will ultimately lead to the loss of your easement.
What if it’s your tenant (as opposed to the neighbor) who blocks the access? This is even worse. If you—or someone associated with you—blocks the access, you may have inadvertently abandoned the easement. The result is the same (loss of the easement) in either situation. However, if the neighbor blocks the access as opposed to you or your tenant, you have more time to react and rectify the situation. Failing to safeguard your easement rights may extinguish them and, consequently, impair your future development plans.
Undoubtedly, reading these stories didn’t make you a property law expert. The law in this area is too diverse and fraught with exceptions to make cut-and-dry pronouncements helpful. The point of these examples is to highlight common problems that might put your investment at risk. As with any potential negative outcome in business, the key is to minimize the chance it will occur—and if it does to vigorously protect your rights.
David W. Berry is a litigation attorney in the Santa Rosa office of Abbey, Weitzenberg, Warren & Emery. He can be reached directly at (707) 542-5050 or via e-mail at dberry@abbeylaw.com.
Are you a local business person with biz wisdom to share with our readers? Then consider writing a piece for Biz Tips. Send your 500 to 1,100-word piece to NorthBay biz.
