If a real estate investor buys an empty land and later plans on building a property right next to yours, a lot of surveying is necessary. This will further tell them about if their property is maintaining the right boundaries and if that is in dispute with the neighbor’s next door or with the empty lot owner next to them. If it is, negotiations can be held between both parties. After careful consideration, the property owners agree on setting up a new boundary that benefits both of them. Once put in writing and legally agreed on, this will be the new boundary according to law. This is known as the agreed boundary.
Agreed boundaries have a number of definitions you can find on the internet, however, none of them really give a clear idea about what it is. Further mentioned below are two common definitions of agreed boundary.
I. An agreed boundary can easily be defined as the approved line that divides the properties between neighboring owners. Since this line might not be a true boundary, it does not have any legal significance until and unless both the parties sign the lot line agreement.
II. While boundaries are the line that divides two neighboring plots, agreed boundaries are the new lines both plot owners have agreed on. However, there needs to be legal documentation of the same and both parties have to sign a lot line agreement to make the boundary a legal one.
While it might seem arbitrary, agreed boundary settlements can have a number of uses in the real estate industry. Some of the more popular uses of agreed boundary are further mentioned here.
It helps settle any kind of dispute over the actual locations of property line. While the owners can settle this dispute in arbitration without going to the court, however, that might lead to future complications. This is why ensuring that you get legal documents of the agreed boundary is very important.
It ensures that both neighboring plot owners have control over the outcome. Property lines are often made without prior survey. Nevertheless, on survey, you might see that it favors another party more than the other. To avoid that, an agreed boundary can help ensure that both parties are happy with it and get the same profits as the other.
