What are my rights as a seller if a buyer has waited until 5 days before closing to have a survey of the property and encroachment issues came up?

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What are my rights as a seller if a buyer has waited until 5 days before closing to have a survey of the property and encroachment issues came up?

The buyers of my home waited until 5 days before closing to get a survey done of my property and have found that on one side of my property there is approximately 9 feet of property that belongs to someone else beside my property. They want to sue my for not disclosing this earlier when I had no knowledge of the encroachment. Also, I told my real estate agent on day one that I thought that there was an encroachment issue in my favor on the other side of my property with another neighbor and she told me to absolutely not say anything to anyone about it. What are my rights?

Asked on September 17, 2011 under Real Estate Law, Maryland

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

While they can't necessary sue you for fraud if you truly had no knowledge of the encroachment, they may have grounds to either rescind the transaction entirely or to sue you for damage (e.g. for the dimunition in value)--the simple fact is that you are evidently not able to fulfill the contract of sale, since the property you are selling is smaller (by 9 feet) than the property they had contracted to buy. It doesn't matter that they waited to have the survey done--you'd be potentially liable if the matter came up even post-sale. You may also have some liability--including possibly in fraud, since you have knowledge--for not disclosing the other encroachment as well, since it also affects boundaries. You should retain an attorney to help you work through this issue, but you need to be prepared that there is a good chance you will owe damages and/or have the sale cancelled.


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