BEING HIS OWN NEIGHBOR

Five years ago a reader of mine bought a house in California. Before the purchase he did a title search to make sure that the seller had full, unrestricted title. The search came up clear and the purchase went through without complication.

Two years later, with interest rates dropping, my reader decided to refinance his mortgage. For that purpose he more carefully examined his title papers and found, much to his surprise, that he and his wife owned not only the lot on which their house stands, but also one-half of the lot next door ... on which their neighbor's house stands.

"I was stunned to learn this," my reader writes.

The house next door is a rental, owned by a woman who lives about 250 miles away. On the rare occasion when she stops by to check on her property, she complains to my reader about the difficulty of maintaining a rental from such a long distance. When he asks why she doesn't sell her place, however, she responds, "Oh, it's too complicated to explain."

Now that my reader realizes that he owns half the land on which her house sits, that complication suddenly seems clearer. What's not so clear is how a previous owner ended up with title to half the property next door, or what my reader should do about it now that he knows how things stand.

"It seems to me that we should offer our neighbor her property back," he writes, "perhaps for the cost of the paperwork, since we didn't know we bought it in the first place."

His lawyer advises him, however, that he'd be a fool not to extract some money from the owner of the neighboring property. The neighbor gave it up for some consideration she received, the lawyer reasons, and my reader simply got lucky when he purchased the property.

"If he found $250,000 buried in his back yard," his lawyer asks, "would he give it back to someone who claimed they had buried it there?"

My reader's lawyer makes a good point. If he's legally entitled to charge the neighbor for the half-lot he owns, upon which her house happens to sit, why not get what he can for it?

The simple answer is that simply being legally entitled to do something doesn't make it the right thing to do. The buried-treasure parallel is hardly persuasive, since he has known for certain who his neighbor is since he purchased his house. Even if he follows his lawyer's advice, his neighbor may refuse or be unable to buy the property back at any price, creating an awkward situation in which his neighbor can never sell a property she doesn't entirely own.

Even so, the neighbor has been collecting rent on a property not entirely hers. There would be nothing wrong with my reader offering to sell the property back to her at a reasonable price plus legal costs, the money to be paid as a portion of the rent she collects over time or, should she decide to sell, as a portion of the sales price.

But if my reader and his wife truly believe that they got their home for a fair price, regardless of whatever consideration the neighbor may have received from a previous owner, and if they want to offer the property back to their neighbor in exchange for nothing more than whatever legal costs may be involved, it's a gesture that any neighbor should appreciate as generous.

Given how they feel, the right thing for them to do is to sit down with their neighbor, explain the situation, extend the offer and then go about getting it done.