‘Good fences make good neighbors,’ but in this case, it’s really not their problem

DEAR MR. MYERS: We live in an older community, where most of the homes were built on oddly shaped lots. Our neighbor is trying to refinance her property and the bank said that she’d first have to get a land survey, which subsequently found that the fence that we share between our homes “encroaches” about 3 feet onto her property. So, now she wants my wife and me to pay to have the fence demolished and replaced with a new one that would be in its proper place. The fence was here when we purchased our home nearly 20 years ago, and we never knew about the encroachment until now. Do we have to honor our neighbor’s request?

ANSWER: “Good fences make good neighbors,” poet Robert Frost wrote, but that’s not always true when a fence or wall doesn’t stand on a proper boundary line. Thousands of lawsuits are filed each year by one homeowner against another when it’s discovered or alleged that a fence, wall or other permanent divider illegally protrudes on the plaintiff’s property.

Fortunately, you probably don’t have anything to worry about. Your letter states that the fence was already there when you purchased your home many years ago, which obviously means that you didn’t build it yourself and therefore have no legal obligation to tear it down and replace it. And even if the surveyor’s report is accurate, the divider stands a few feet on the neighbor’s side of the property line – which makes it her problem, not yours.

It would be a nice gesture if you offered to pay half the cost of removing the fence and rebuilding it in the proper place, even though you likely have no legal obligation to do so. If you obtained an owner’s title insurance policy to protect your interest in the home when you first purchased the property, call the insurer for additional suggestions.

Should the issue fester and the neighbor eventually files a lawsuit, it’s doubtful that a judge would rule in her favor. You even could countersue and ask a judge to demand that the fence stay exactly where it is now under the state’s “adverse possession” or “easement by prescription” laws – two related legal concepts used in all 50 states that allow one person to permanently occupy or use another’s real estate if certain conditions have been met.

If the issue appears to be headed for court, though, you’d be wise to consult with a real estate attorney soon.

REAL ESTATE TRIVIA: Most researchers agree that the proverbial picket fence mushroomed in popularity in the early 20th century, when homeowners wanted to define their property boundaries in ever-growing urban areas while keeping their kids and pets safe – all without obstructing the view from their windows.

DEAR MR. MYERS: What is an “apartment hotel”?

ANSWER: It’s a rental complex that blends the features of both an apartment building and a hotel. Units in such developments typically are pre-furnished, with housekeeping or other services that often are offered by hoteliers.

Unlike overnight lodging facilities, though, residents in an apartment hotel may stay for several months or even years. They usually pay on a weekly or monthly basis.

DEAR MR. MYERS: I am in the process of negotiating with a debt-collection agency to settle an old, unpaid credit-card debt for about half of what I actually owe. If I can work out the deal, will the collection agency immediately remove the old account from my credit report? I want to refinance my mortgage later this year, so I want the best credit-score possible in order to get a better interest rate.

ANSWER: I have some good news and some bad news. Let’s start with the bad news.

When a creditor or collection agency agrees to settle an account for less than the amount owed, it updates the debtor’s credit report with a note that typically reads something like the account has been “paid in full for less than the full balance.” But the account itself remains on the report for several years, even if it has been closed and the balance is now zero.

Now, the good news: The lender you choose to refinance your mortgage later this year will consider the fact that you have settled the debt, even though the collection agency agreed to accept less than it was owed. That can work in your favor because it shows that you took some financial responsibility for the old account, which suggests that you will take your future mortgage payments seriously.

Be ready to explain to the mortgage lender why you fell behind on the payments on your old credit-card account. Good reasons may include the temporary loss of a job, big medical bills or other large but unexpected expenses.

David W. Myers’ column is distributed by Cowles Syndicate Inc.