In New South Wales problems with encroaching buildings are dealt with under the Encroachment of Buildings Act 1922 (Act). 

The Act gives the NSW Land and Environment Court (LEC) power to settle encroachment disputes between neighbours. 

What is an encroachment?

The Act allows the LEC to make orders in respect of any encroachment by a "substantial building" of a "permanent character". 

This requirement of "substantial building" of a permanent character has been interpreted broadly and held to encompass a concrete driveway, retaining wall, protruding floor beams and a fence set in concrete foundations.

What can the LEC do about it?

The LEC can make whatever order it deems "just" with respect to:

(1)   the payment of compensation to the person on whose land the encroachment sits;

(2)   the conveyance, transfer, or lease, of the area over which the encroachment sits; or

(3)   the removal of the encroachment.

So, there’s 3 options, payment of compensation, grant an interest in the land upon which the encroachment sits or order removal of the encroachment.

If the LEC decides that an encroachment should be remedied, it can order transfer of ownership of the land on which the encroachment sits or where it might be more appropriate in the circumstances the LEC can order the grant of a lesser interest such as an easement or a lease, especially as it is normally only necessary for the encroaching owner to have rights over the land for the life of the building or structure. Alternatively, the LEC may order the encroachment to be demolished or the encroaching structure moved to within the proper boundaries. 

In some cases, for example where the encroachment is minor or trifling so as to cause little to no inconvenience to the enjoyment of your land the LEC my grant no relief at all, thus permitting the encroachment to remain. 

What does the Court consider when determining whether to make an order?

The LEC will consider when choosing between these options things like:

• the situation and value of the land encroached upon and the nature and extent of the encroachment;

• the character of the encroaching building, the loss and damage which has been or will be incurred;

• the loss and damage which would be incurred by the encroaching owner if the encroaching owner is required to remove the encroachment; and

• the circumstances in which the encroachment was made.

Note that this list is not exhaustive. 

Other relevant matters might include any arrangement between neighbours permitting the encroachment to occur and to remain and importantly, whether the neighbours (especially the applicant) knew of the encroachment when purchasing the land.

It is also worth nothing that in reaching a decision the LEC must take into account circumstances in which the owner of the land may have conducted itself in a way in which that neighbour would later be prevented from asserting the existence of the encroachment (for example where they had actively encouraged the encroachment or where they purchased the property with a reduced purchase price on account of the encroachment). 

Who pays the cost of the LEC proceedings?

The LEC has the power to order payment of costs, charges, and expenses as it deems "just“ so it has a wide discretion as to how costs are dealt with.

The LEC can take into account any offers made before the proceedings were commenced. This means if your neighbour gives you an offer of compensation before the proceedings or during the proceedings you would need to consider that offer carefully as it could be used later in the event that the LEC makes an award for compensation that is less than the amount offered by your neighbour.

Normally in this jurisdiction, the loser pays the winner's cost, although sometimes the LEC may deem it appropriate to leave each party to pay their own costs.

If you are concerned about an encroachment on your land or just want advice, contact us and we can advise you on the appropriate course to take.