The Encroaching Fence, the Gravel Drive, and the 21-Day Due Diligence Deadline
Your client, Beacon Holdings LLC, has a signed contract to buy a 6.2-acre commercial parcel in Cary for $1.45 million. The contract has a 21-day due diligence period ending Friday and a 7-day cure period after seller delivers title commitment. The title commitment excepts "rights of parties in possession" and a 1998 easement to Duke Energy. A survey delivered yesterday shows that the neighboring auto shop's chain-link fence and a 14-foot-wide gravel drive sit entirely on the parcel, with the drive serving the shop's rear bay. The seller's agent says the shop has used the drive "since before 2010" and that the seller never had a problem. The seller refuses a price reduction. The client wants to close in 30 days to lock in a tenant. The title insurer will not insure the drive as an appurtenance but will insure the fence line as a survey exception. The contract makes time of the essence.
1. Does the neighbor likely have an easement by prescription or title by adverse possession? What facts must be developed before the due diligence deadline?
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North Carolina requires roughly 20 years of continuous, open, notorious, hostile, and actual use for a prescriptive easement, and a similar period plus other elements for adverse possession. The statement "since before 2010" establishes at most about 16 years by 2026, short of the period unless the shop can tack its use to a predecessor in privity. That is the central factual question.
Before the deadline, obtain affidavits from prior owners and the shop's owner, historical aerial photographs, repair and maintenance records, tax records, and a boundary survey with the fence line and drive depicted. Search the chain of title for recorded easements or agreements. Determine whether the use was permissive, whether the shop ever asked permission, and when the fence and drive were built. Do not rely on the seller's oral assurance or the agent's characterization. The title exception for rights of parties in possession and the insurer's refusal to insure the drive as an appurtenance make this a real title risk, not a cosmetic survey issue.
2. What are the client's practical options before the 21-day period expires, and what should the paralegal prepare?
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The client can terminate and recover earnest money; negotiate a price reduction or escrow holdback; require the seller to obtain a quitclaim deed or written easement release from the shop; negotiate a boundary line agreement; or file a quiet title action if the neighbor claims an interest. Because time is of the essence, any objection or extension request must be in writing before the deadline. The paralegal should prepare a due diligence objection letter preserving all rights, a calendar entry for the Friday deadline and the 7-day cure period, and a checklist of missing survey and title documents. Also prepare a short client memo comparing the cost of a holdback against the risk that the tenant needs unobstructed access. Do not let the client close without a written resolution or an acceptable title endorsement. If the seller refuses to extend, the attorney must advise on termination versus acceptance of the risk.
3. How should the paralegal document the title objection and the client's decision?
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The file should contain a dated title objection letter identifying the specific survey exceptions, the fence and drive dimensions, the 1998 Duke Energy easement, and the insurer's coverage position. Attach the survey, title commitment, and any photographs. Record the seller's refusal to reduce the price and the agent's statements verbatim, labeled as hearsay or informal statements rather than verified facts. Prepare a client decision memo listing each option, the estimated cost, the deadline, and the consequence of inaction. Send it by email and regular mail, and calendar a follow-up call. If the client elects to proceed, obtain written acknowledgment of the unresolved risk and confirm whether the tenant's lease requires clear access. Keep the paralegal's role documentary and analytical; the attorney should give the legal advice and sign the objection letter.