Encroachment Explained for Property Buyers
An encroachment is when part of a building, fence, driveway, or other structure crosses over a property's legal boundary and sits on a neighbouring lot.
What Does Encroachment Mean?
An encroachment occurs when something physical on one property extends past its legal boundary and onto the land next door. It could be a garage that sits half a metre over the line, an eave that overhangs a neighbour's yard, a retaining wall built in the wrong spot, or a fence that was never aligned with the actual survey pegs. The structure exists in reality, but it doesn't match what the title plan says should be there.
Buyers usually come across encroachment as a line item in a title search, a survey report, or sometimes a building and pest inspection that notices something doesn't line up with the block's boundaries. It can also surface during conveyancing, when the solicitor or conveyancer reviews the certificate of title and any registered plans against what's actually built on site.
The real-world implication is that an encroachment isn't just a technical footnote. It can affect what you're legally entitled to do with the property, whether you can get finance or insurance without extra conditions, and how easily you can sell the property again later. Some encroachments are trivial and long-settled between neighbours; others create genuine legal and financial exposure that a buyer needs to understand before signing.
Why This Matters for Buyers
An encroachment changes the risk profile of a purchase, even when the property looks fine on inspection. If a structure on the land you're buying sits on the neighbour's block, that neighbour could potentially require it to be removed or altered, which is a cost and hassle you'd inherit as the new owner. If it's the other way around, and a neighbour's structure encroaches onto the property you're buying, you may have limited ability to build, extend, or fence that section of your own land.
Lenders and insurers sometimes treat known encroachments as a risk flag. A bank's valuer may note it, and title insurance is often recommended specifically to cover encroachment risk, which adds a cost buyers don't always budget for. This matters most for finance timing, since an unresolved encroachment issue can slow down or complicate loan approval close to settlement.
Encroachments also affect negotiating position. If one is identified during due diligence, a buyer has genuine leverage to ask for a price adjustment, a special condition in the contract, or for the vendor to resolve the issue before settlement. Buyers who don't pick it up until after they own the property lose that leverage entirely.
Timing is the other practical issue. Encroachment problems are far easier to deal with before exchange than after. Once contracts are exchanged, a buyer's options narrow considerably, so this is squarely a pre-purchase due diligence matter rather than something to sort out later.
Common Mistakes Buyers Make
Encroachment is easy to overlook because it rarely shows up unless someone is specifically looking for it. These are the mistakes that come up most often.
- Assuming fences mark the real boundary — a fence line is often a rough historical marker, not the surveyed legal boundary, and the two can be a metre or more apart.
- Skipping a title and plan review — relying on a visual walk-through instead of having a conveyancer check the certificate of title against what's actually built.
- Not asking about known disputes — vendors aren't always required to volunteer encroachment issues unprompted, so buyers need to ask directly.
- Treating any encroachment as a deal-breaker or a non-issue — the right response depends on the size, location, and history of the encroachment, not a blanket assumption either way.
- Leaving it until after settlement — trying to resolve an encroachment once you own the property is slower, costlier, and removes your negotiating leverage entirely.
How This Shows Up in the Illawarra
Encroachment issues turn up more often in the Illawarra's older housing stock, particularly in suburbs like Wollongong, Bulli, Thirroul, and Corrimal where original surveys date back decades and additions have been made over time without always being checked against the boundary. A carport, garden shed, or extension built by a previous owner without formal approval is a common source of an undetected encroachment.
Escarpment and sloped blocks add another layer, since retaining walls are often built to manage the drop between properties and can end up sitting on or across a boundary line without either owner realising. Coastal blocks with older timber or besser block fencing can also show a gap between the physical fence and the legal boundary once a proper survey is done.
Because much of the Illawarra's Torrens title stock is on individually titled blocks rather than strata, encroachment is a more relevant check here than it would be in an apartment purchase, where the building's footprint is fixed within the scheme. For a freestanding house or duplex, it's worth treating boundary and encroachment checks as a standard part of due diligence rather than an edge case.
Practical Takeaway
Encroachment isn't something most buyers can spot by eye, which is exactly why it needs to be checked deliberately rather than assumed away. A conveyancer reviewing the title and plan, and in some cases a fresh survey, is the practical way to confirm whether what's built matches what's legally described.
If an encroachment is identified, the next step is understanding its size and history before deciding how much it matters. A small, long-standing overhang that neighbours have quietly accepted for years is a very different situation to a recent structure with no agreement in place. Getting clarity on that distinction shapes whether it's worth negotiating on, walking away from, or simply proceeding with eyes open.
In short: when you're buying a freestanding property, ask your conveyancer to specifically check for encroachment as part of the title and contract review, not just rely on a general inspection. If anything comes up, raise it before exchange, not after.
Frequently Asked Questions
What does encroachment mean in property terms?
It means part of a structure, such as a wall, fence, shed, or eave, physically crosses over the legal boundary line onto a neighbouring property.
When does encroachment usually come up in a purchase?
It typically surfaces during a title search, boundary survey, or when a conveyancer compares the registered plan against what's actually built on site.
Is an encroachment always a serious risk?
Not always. Some are minor and long accepted by neighbours, while others carry real legal, financial, or resale risk. The size, location, and history of the encroachment all matter.
Can an encroachment be negotiated in the contract?
Yes, in many cases. Buyers can ask for a price adjustment, a special condition, or for the vendor to resolve the issue before settlement, provided it's raised before exchange.
Should first home buyers worry about encroachment?
Yes, it's worth checking regardless of experience level, since the financial and legal consequences apply to any buyer, not just seasoned ones.
How does encroachment affect settlement timing?
If it's picked up late, resolving it can delay finance approval or settlement itself, which is why it's better identified early in due diligence.
How does this fit into the NSW buying process?
It's typically checked by your conveyancer or solicitor as part of the standard title and contract review before you exchange contracts.
Does a buyers agent help with encroachment issues?
A buyers agent can flag when something looks worth investigating and coordinate with your conveyancer and building inspector, though the legal assessment itself sits with your conveyancer or solicitor.
If a title search or building report has flagged a possible encroachment on a property you're considering, it's worth talking it through before you commit. We can help you weigh up whether it's a minor issue or a genuine risk.
