Forums / Property Investing / Help Needed! / Fencing Dispute when developing property

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  • Profile photo of MarkBMarkB
    Participant
    @markb10
    Join Date: 2018
    Post Count: 6

    I’m not going to give away what side I own as I want unbiased opinions.

    Family A and Family B decide to buy a property together and subdivide it into two blocks. Both families want the right side, as the demand is high, it was agreed, it will go into a draw. Whoever gets the right-side block, gives the other family $2,500. From the draw an agreement was drafted by the conveyancer stating the rightful owners of each side.

    Currently there is a house on the property that will be demolished in the coming months. Demolition and subdivision costs was agreed to be shared by both parties.

    There are existing fences on the perimeters, one side fence is newish, there is no need for replacement. The other side fence is old and needs to be replaced. There wasn’t any discussion or agreement about the costs to replace the existing fences on either side.

    The house plans of both families are designed to be built on the boundary with their respective neighbours. The houses are not joined in the middle. From experience it is customary to do fences post-construction due to the possibility of damage during house-building, not knowing the ground level and how much fencing is required due to building on boundary.

    Family A thinks the only shared costs should be the middle fence, all other fences are responsibility of the property owner. Family B believes all costs to fix/replace the existing fences no matter what side they are on should be shared between the two families.
    Who is correct?

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,173

    No one is correct because there is no correct answer. It is up to negotiation until subdivision occurs and then it is that owner’s responsibility – with the neighbours as fencing is generally shared.

    But if I was family A I wouldn’t want to pay to fix a fence that I won’t get to be owner of.

    Hope you got advice about stamp duty too btw.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
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    Profile photo of MarkBMarkB
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    @markb10
    Join Date: 2018
    Post Count: 6

    So if you were Family B, would you expect or assume Family A is automatically liable to pay half of your fence?

    • This reply was modified 1 year, 4 months ago by Profile photo of MarkB MarkB.
    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
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    So if you were Family B, would you expect or assume Family A is automatically liable to pay half of your fence?

    No, because it is not on their part of the land.

    Was the land partitioned at purchase or has it been?

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of MarkBMarkB
    Participant
    @markb10
    Join Date: 2018
    Post Count: 6

    So if you were Family B, would you expect or assume Family A is automatically liable to pay half of your fence?

    No, because it is not on their part of the land.
    Was the land partitioned at purchase or has it been?

    An agreement was drafted by the conveyancer stating who owns which side of the property based on the agreement made from the draw. We are in the process of getting the subdivision finalised.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,173

    Gee, this is probably out of the conveyancers depth. Why didn’t you use a lawyer? Did you discuss the CGT and stamp duty, and GST aspects of transferring title?

    If it is a valid partitioning of the land then you will each beneficially own the separate portions of the block and therefore family B should be paying for the fencing on their ‘lot’.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of MarkBMarkB
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    @markb10
    Join Date: 2018
    Post Count: 6

    Gee, this is probably out of the conveyancers depth. Why didn’t you use a lawyer? Did you discuss the CGT and stamp duty, and GST aspects of transferring title?

    If it is a valid partitioning of the land then you will each beneficially own the separate portions of the block and therefore family B should be paying for the fencing on their ‘lot’.

    Didn’t think it was necessary at the time. We had a clear understanding of how it should work and the other family had theirs and unfortunately here we are.

    Yes we have all the CGT and GST aspects sorted thanks for asking

    Profile photo of MarkBMarkB
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    @markb10
    Join Date: 2018
    Post Count: 6

    Does anyone else have an opinion or advice on my post?

    Profile photo of Ethan TimorEthan Timor
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    @ethantimor
    Join Date: 2016
    Post Count: 282

    Agree with Terry that there is no “correct” answer.

    I can get the logic of family A but why does family B believe both parties should pay for all fences?

    Did you guys happen to establish some dispute resolution mechanism? If not, is there a third party both families trust and can agree that her/his decision (after hearing both parties) will be accepted as final, ideally with no hard feelings?

    Ethan Timor | Aligned Finance Pty Ltd
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    Active Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)

    Profile photo of MarkBMarkB
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    @markb10
    Join Date: 2018
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    Agree with Terry that there is no “correct” answer.
    I can get the logic of family A but why does family B believe both parties should pay for all fences?
    Did you guys happen to establish some dispute resolution mechanism? If not, is there a third party both families trust and can agree that her/his decision (after hearing both parties) will be accepted as final, ideally with no hard feelings?

    Family B believed that “sharing all fence costs” was correct and commonly used by property developers and had assumed family A was on the same page from day one. After the disagreement they also spoke with a developer who said they were correct and family A were wrong in thinking otherwise.

    Family A have had experience with developing property on their own in the past. They know people that have done this before with friends and family using their method. They were never under the impression that fencing was shared. They believed it was common sense that all issues found on either side is the responsibility of the owner of that side.

    Just an update. Family B stated that they would never had chosen the side they chose if they knew they had to pay for their own fences. Family A then offered to contact the conveyancer and change over the titles and they will pay for ALL fences on their side but Family B refused. Family B have now backed down unwillingly and have agreed to do it Family A’s way

    Profile photo of Ethan TimorEthan Timor
    Participant
    @ethantimor
    Join Date: 2016
    Post Count: 282

    Patchy start… 😬😬 hope it will all be smooth sailing from here 🙏👍😎

    Ethan Timor | Aligned Finance Pty Ltd
    http://www.alignedfinance.com.au/
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    Active Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)

    Profile photo of vyaw2003vyaw2003
    Participant
    @vyaw2003
    Join Date: 2006
    Post Count: 185

    your outside fences are your own problem, split that bill with the owners on each outside fence.
    Is Family A going to pay for half of Family B’s Tv when it also breaks? lol

    • This reply was modified 1 year, 3 months ago by Profile photo of vyaw2003 vyaw2003.
    Profile photo of beasbeas
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    @beas
    Join Date: 2006
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    Hi Mark B, I’m finding this post more than a year later but in my view, for any other posters that find themselves in a similar position, just get along. You have to be neighbours for a long time. That is more important than saving $1000. You will mind each other’s houses and help each other out. We got “done” by one new neighbour when we wanted to build a (standard) 6′ high timber paling dividing fence. He contributed half of the cost of a chain wire fence (the minimum). Who uses chain wire fences these days? Anyway… he saved himself about $600 and we paid 3/4 of the price. When the shoe was on the other foot, and we bought a new house, and the neighbour wanted to build a fence, we were “wise” this time, and said we’d pay “half the cost of a ‘chain wire’ fence (they wanted timber) This was a BAD decision!!!! We have been their neighbours for 17 years now and I still feel bad about being mean… Fortunately the older and wiser neighbour on the other side actually said to me “pay half of the timber” – and we did. The neighbour was rapt. But the initial “being dollar wise” (ie mean) still haunts me. These neighbours have been so good, watch our house, loan us stuff, and I wanted to stiff them for $600??? Not worth it. You two families should get along. Family A thought “good, we’ve got the better side with the better fence” Family B thought “oh well, we got the worse side, oops, we’ve also got the worse fence, we didn’t think of that, Hey Family A, how about you put a bit towards the boundary fence, we didn’t think of that…” As Family A, you don’t “have to” contribute anything – but – based on my experience, I would make a contribution. Maybe a quarter of the cost, as a good faith payment? Or buy them a carton of bubbly or beer. Or something. To acknowledge you know you got the “good” fence and you want to do something nice for them. Life is too short to be mean and saving a few dollars now is not worth a fractured relationship, no matter how “unreasonable” you might feel Family B is being. Family B feels sad they got the less desirable block. Give a little. Family A got the best deal.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,173

    good advice Beas

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of MarkBMarkB
    Participant
    @markb10
    Join Date: 2018
    Post Count: 6

    Hi Mark B, I’m finding this post more than a year later but in my view, for any other posters that find themselves in a similar position, just get along. You have to be neighbours for a long time. That is more important than saving $1000. You will mind each other’s houses and help each other out. We got “done” by one new neighbour when we wanted to build a (standard) 6′ high timber paling dividing fence. He contributed half of the cost of a chain wire fence (the minimum). Who uses chain wire fences these days? Anyway… he saved himself about $600 and we paid 3/4 of the price. When the shoe was on the other foot, and we bought a new house, and the neighbour wanted to build a fence, we were “wise” this time, and said we’d pay “half the cost of a ‘chain wire’ fence (they wanted timber) This was a BAD decision!!!! We have been their neighbours for 17 years now and I still feel bad about being mean… Fortunately the older and wiser neighbour on the other side actually said to me “pay half of the timber” – and we did. The neighbour was rapt. But the initial “being dollar wise” (ie mean) still haunts me. These neighbours have been so good, watch our house, loan us stuff, and I wanted to stiff them for $600??? Not worth it. You two families should get along. Family A thought “good, we’ve got the better side with the better fence” Family B thought “oh well, we got the worse side, oops, we’ve also got the worse fence, we didn’t think of that, Hey Family A, how about you put a bit towards the boundary fence, we didn’t think of that…” As Family A, you don’t “have to” contribute anything – but – based on my experience, I would make a contribution. Maybe a quarter of the cost, as a good faith payment? Or buy them a carton of bubbly or beer. Or something. To acknowledge you know you got the “good” fence and you want to do something nice for them. Life is too short to be mean and saving a few dollars now is not worth a fractured relationship, no matter how “unreasonable” you might feel Family B is being. Family B feels sad they got the less desirable block. Give a little. Family A got the best deal.

    Thanks for the very good advice Beas! I know how important it is to have good neighours. Our current neighbours where we live at the moment are like family and it’s been great to be surrounded by people you can trust. It’s going to be sad to move once our house has been built

    This is going back a long time now, so much has happened since I wrote this post. The cost of the fences on their side would be around 5-7k to erect all of them so it’s not a small amount to just split with them. We did offer to pay for the middle fence entirely which will roughly cost us around 3k. They declined the offer. I honestly wanted to make things good with them at the time but unfortunately the disagreement with how things should be done got in the way. We haven’t spoken to them since this has happened.

    We have been building our new house now for the past 2 months and it’s coming along very well for us. No major issues for us so far which is great.

    Family B have only just started leveling the land last week. Their levels are very low at the back and as a result they now require a considerable amount of retaining with their neighbour. Obviously this is something they didn’t predict because when they approached us to pay half of their fences over a year ago they wanted us to fix and erect all fences before building/leveling the land. If we did it their way and we did in fact pay half, all the nice new fences on their side would be pulled down because they now require retaining due to the level of their house.

    I think they had their own interpretation of how to build a property and unfortunately due to their inexperience it has gotten them into a bit of trouble.

    At the very beginning my wife and I wanted to work with them and give them help/assistance throughout the whole process as we have had experience with this before. Our intentions were there but unfortunately they didn’t turn out to be who we thought they were

    Profile photo of BuyersAgentBuyersAgent
    Participant
    @knightm
    Join Date: 2005
    Post Count: 317

    Excellent first post @beas and true life is too short to be mean.

    @markb10 so where does this leave you currently? Are you still fenceless?

    BuyersAgent | Precium
    http://www.precium.com.au
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    South Coast NSW Independent Buyers Agent - Wollongong to Batemans Bay and Regional NSW. DOWNLOAD OUR FREE 14 POINT PROPERTY BUYER'S CHEATSHEET to avoid painful mistakes at precium.com.au

    Profile photo of MarkBMarkB
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    @markb10
    Join Date: 2018
    Post Count: 6

    Our build is about 2 months in now. The other side and rear of our property is fenced. We need to approach our neighbors at some stage after both houses are built to erect the middle fence.

    Profile photo of BuyersAgentBuyersAgent
    Participant
    @knightm
    Join Date: 2005
    Post Count: 317

    Our build is about 2 months in now. The other side and rear of our property is fenced. We need to approach our neighbors at some stage after both houses are built to erect the middle fence.

    ok – I agree getting all retaining walls and levels right prior to erecting the fence is a good idea and should help avoid doing it twice. All the best with the approach!

    BuyersAgent | Precium
    http://www.precium.com.au
    Email Me | Phone Me

    South Coast NSW Independent Buyers Agent - Wollongong to Batemans Bay and Regional NSW. DOWNLOAD OUR FREE 14 POINT PROPERTY BUYER'S CHEATSHEET to avoid painful mistakes at precium.com.au

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