Encroachment Generally

Encroachment can be a frustrating issue for landowners. It occurs where an adjacent dwelling has been constructed to incorrect boundaries, or part of the building is overhanging or crossing over a boundary.

The Encroachment of Buildings Act 1922 (NSW) (EBA), which is the legislation that deals with this issue, defines encroachment as encroachment by a building and includes encroachment by an overhang of any part as well as encroachment by the intrusion of any part in or upon the soil.

Determining the correct boundary

Landowners can seek a boundary determination under Part 14A of the Real Property Act 1900 (NSW) to clarify the perimeter of their property.

2.2 Generally, residential construction contracts will contain provisions regarding property boundaries. Risk is often passed to the homeowner to ensure the boundaries are correct before construction commences.

Homeowners should ensure they are certain of the correct boundaries prior to any construction commencing which might impede or encroach on another property, exposing them to a claim under the EBA.

Remedies under the EBA

There are various remedies available under the EBA. Actions are brought in the Land and Environment Court of NSW and include removal of the encroaching structure or the payment of compensation to the aggrieved owner. Proceedings can be commenced by either the adjacent owner or the encroaching owner (s3(1) EBA).

Section 3(2) of the EBA provides that the following relief may be sought in the Land and Environment Court:

(a) the payment of compensation to the adjacent owner,

(b) the conveyance transfer or lease of the subject land to the encroaching owner, or the grant to the encroaching owner of any estate or interest therein or any easement right or privilege in relation thereto, and

(c) the removal of the encroachment.

Section 4(1) of the EBA provides that if the encroachment was not intentional and did not arise negligently, the minimum amount of compensation payable to the aggrieved owner is the value of the land itself.

However, in circumstances where the encroaching owner cannot satisfy the court that their conduct was not unintentional or negligent, the compensation payable can be up to three times the value of the land.

Further costs can be payable if the aggrieved owner has suffered additional loss or damage arising from the encroachment. This might include any depreciation in the value of the land and any loss incurred due to the orders made with respect to the encroachment (EBA s4(2)).

Sections 6 and 7 of the EBA also confer on the court the power to order a transfer, lease or easement concerning the encroachment, which is avenues also available under the Conveyancing Act 1919 (NSW).

We’re here to help

Whether an encroachment has been recently discovered or has been the subject of concern between neighbours for some time, dealing with an encroachment can be a frustrating issue for both parties.

Should you require advice concerning any of the matters discussed here, don’t hesitate to contact our building & construction team for a consultation.