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Dealing with Encroachments and Easements and Financing Your Home

This past Saturday we had Randy Johnson from Liberty Title on the show to talk about encroachments and easements.  First things first, let’s define each.  An encroachment is an intrusion onto a property of another and an easement is the answer to that, where you get the privilege or right to use the property where your structure or your use is intruding onto the property of the other party.

A pretty popular easement is a driveway easement.  So what happens if there’s not an easement in place and it’s a shared driveway?  If there’s not a written instrument that delineates what the responsibility of each party is, the title company will raise an exception.  It will be on the commitment and then goes to the lender.  The lender will then delineate the responsibilities and who’s going to maintain the driveway, where it’s going to be located, etc. so there are no problems in the future.

What is an example of an encroachment?  There are ones of temporary and permanent nature.  For instance if a fence is put on the other parties property or a garage or pool were not plotted out correctly to begin with and went into the neighbors yard.  In order to solve these issues, you should seek legal advice.  You’ll then want to look at how accurate the info is that details the encroachment and also get a survey of exactly where the boundaries of the property are.  A precautionary measure to take to avoid encroachment issues when purchasing a home or land is to make the previous owner figure it out by asking them to provide a certified survey.

John Castilone also joined us from WJ Bradley this week.  Something that John has been noticing lately is that people are coming in with cash to purchase a house.  Mortgage companies do not like cash because they want to be able to see where it is sourced from.  The money needs to be in a bank for 60 days if it didn’t come directly from your payroll so that you can see that it is good money and not that you sold a boat or you took out a loan from someone else that the underwriter might not be aware of.  Just some advice for those looking to purchase a home soon and looking for a smooth process!

There were a lot of great questions that were asked:

Mike from Roseville: We live in a townhome development and many more are becoming rentals, should we change the bylaws and limit the number of rentals to a certain percentage?

John Castilone: When people are looking at homeowner’s association rules and whether or not they are able to buy the property, typically there are limits of how many properties can be rented within those bylaws and that also fits into whether that homeowners association in that complex will fit in with the Fannie and Freddie guidelines.

Bruce: We built a house in 1995 on a lot that is divided by a pond and the only way I can access the other side of the pond is by an undeveloped strip of land that is owned by my neighbor.  Recognizing that property will eventually change hands, do I have any easement rights for what I’m doing and if so what are they and how should I protect them in the future?

Randy Johnson: First, look at getting an actual easement recorded that describes the easement and gives you that written permission to use that property.  Also, look at the size of the pond.  A lot of ponds in Minnesota acquire lake status and if you have lake status then there are Riparian rights that you acquire with that which gives you some right to walk along the boundary of that lake or pond so you need to look at some of those issues to determine where you are at and seek legal counsel.

Q: Did a rule change with listings? Multiple listings in multiple neighborhoods are calling a tiny office or nursery without a closest a bedroom.

A:  It really depends what city the bedroom is in.  A closest does not always define what a bedroom is.  Also, agents are helping you envision what a possibility you could have with it.  For instance, say you need a three bedroom but it’s showing as a two bedroom and they’re using one as an office, but could easily turn it into a bedroom.  They really aren’t trying to mislead you.  Typically a bedroom always has to consist of 72+SF, an egress window, a door and would need to be finished to count as a bedroom.

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