It is a fact that land owners in Australia can be faced with the issue of encroachments. This is because an encroachment can occur when a land owner has a building that intrudes or overhangs on a neighbouring property and that neighbour is negatively impacted by the encroachment.
If you find yourself in a situation where you or your neighbour may have an encroachment, the first step in resolving the issue is to notify the encroaching owner and attempt to negotiate a suitable outcome. In most cases, encroachments can be resolved if it is identified early enough or it is easy to remove; however, that may not always be the case where it is permanent and would cost significant expense to remove. In these circumstances, it may be necessary for one of the parties to make an application to the court seeking relief in respect of that encroachment pursuant to section 184 of the Property Law Act 1974.
Such relief may include:
1. Payment of compensation to the adjacent owner;
2 The conveyance,transfer or lease of the subject land to the encroaching owner;
3. The grant of any easement, right or privilege in relation to the land; and
4. The removal of the encroachment.
What is an appropriate remedy?
When determining an appropriate remedy, the court will consider a balance of all the relevant factors that give rise to the relief. These factors include the situation and value of the subject land,the nature and extent of the encroachment, the character and purpose of the encroaching building, the loss and damage caused by the encroachment, the loss and damage that would be incurred for removing the encroachment and the circumstances in which the encroachment was made.
Upon consideration of these factors, a common remedy is an award of compensation to the adjoining land owner if removing the encroachment is not a suitable option. Under the Property Law Act, the minimum compensation to be paid in respect of any conveyance, transfer, lease or grant is the unimproved capital value of the subject land.What is considered the unimproved capital value of the subject land was determined in Shadbolt v Wise  QSC 348 to mean the market value of the land. If the encroachment was intentional and arose as a result of negligence then the minimum compensation is at least three times that amount.
In order to ensure that an award of compensation is in fact paid to a person that is aggrieved by the encroachment, the legislation has provided protection by enabling that person to register the order for payment of compensation over the encroaching owner’s property in the land registry.The effect of this is that it ensures compensation is paid by operating as a charge upon the land and takes priority to any charge created by the encroaching owner or their predecessor in title. An example of the process can be illustrated from the facts
considered in Shadbolt v Wise. In this matter, the applicant constructed a swimming pool and a pool enclosure that encroached on the respondent’s neighbouring property. The land upon which the encroachment was situated was not impacted to any significant degree. When determining the matter, the Court found that the dismantling of a pool enclosure and the demolition of a pool would result in the destruction of a significant asset at a significant cost.The decision in this regard was influenced by the primary fact that the loss of land would not significantly impact on the value of the land and therefore the appropriate relief was to award compensation rather than the
removal of the encroachment.
Should you have concerns about a potential encroachment on a property, please contact our office to discuss.