Encroachment

Any structure or object that protrudes beyond a property's legal boundary, into a neighboring property. The encroachment must be corrected or be insured by the title insurance before a mortgage loan can be closed for its purchase or financing. For example, if your fence is accidentally built on your neighbor's property then that fence is an encroachment. Even if your neighbor allows it, the title company must insure this encroachment or obtain a "hold harmless" letter before concluding the settlement. For more information, see the "All About Easements" article in the "Real Estate In-Depth" section.

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